■6         , 


Digitized  by  the  Internet  Archive 

in  2007  with  funding  from 

IVIicrosoft  Corporation 


http://www.archive.org/details/creditmobilierofOOcrawrich 


The  Credit  Mobilier  of  America. 


THE 


Credit  Mobilier 


OF    AMERICA 


ITS    ORIGIN    AND   HISTORY 


ITS  WORK    OF 

CONSTRUCTING  THE  UNION   PACIFIC   RAILROAD 

AND   THE    RELATION   OF 


MEMBERS    OF    CONGRESS    THEREWITH 


By  J.    1^.   CRAWFORD 


BOSTON 

C.  W.  CALKINS  &  CO.,  PUBLISHERS 

1880 


^^^1> 


^ 


iPHtCKR 


Entered  according  to  Act  of   Congress,  in  the  year  1880,  by 

C.   W.    CALKINS    &    CO. 

In  the  office  of  the  Librarian  of  Congress,  at  Washington,  D.  C. 


Press  of  C.  W.  Calkins  &  Co.,  Bostok. 


PREFACE. 


In  presenting  this  book  to  the  public  the  author  has 
been  led  by  the  hope  that  it  might,  in  a  measure,  clear 
away  much  of  the  misunderstanding  that  has  always 
existed  regarding  the  objects  and  accomplishments  of 
the  Credit  Mobilier.  For  years  it  has  been  received, 
as  a  fact  beyond  dispute,  that  the  work  of  this  cor- 
poration was  one  of  fraud  upon  the  Government  and 
the  people  of  this  country.  It  has  been  talked  about 
by  almost  every  one.  It  has  been  commented  upon  in 
the  press  and  before  the  public  until  its  name  has 
become  a  familiar  sound  in  almost  every  household  in 
the  land.  In  all  this  controversy  there  has  been  one 
uniform  opinion,  and  that  opinion  has  been  entertained 
almost  unanimously  by  the  the  public.  Not  less  was 
the  author  at  one  time  impressed  with  this  same 
general  idea.  He,  in  common  with  nearly  all  others, 
believed  that  those  who  had  carried  on  this  work  had 
used  their  power  and  influence  to  grow  rich  at  the 
expense  of  the  government.  As  he  read  the  reports, 
which  had  been  submitted  to  Congress  by  the  com- 
mittees  of  investigation,  still    more    firmly  did    he    find 


184399 


VI.  PREFACE. 

that  opinion  impressed  upon  his  mind.  A  careful 
reading  of  the  testimony  upon  which  those  reports 
were  based,  led  to  the  conviction  that  an  almost  fatal 
error  had  been  committed,  and  that  the  judgment 
which  had  been  rendered  by  the  public  was  one  not 
supported  by  the  evidence,  and  which  would  never 
have  been  pronounced  had  an  opportunity  been  given 
for  the  consideration  of  the  truth.  The  judicial  inves- 
tigations that  have  been  accorded  by  the  courts  have 
done  much  to  remove  the  doubts  of  many,  and  to 
give  a  clearer  insight  into  the  true  relations  of  the 
most  gigantic    achievement    of    the    present    century. 

Time  had  in  a  great  measure  overcome  the  feeling 
against  the  Credit  Mobilier,  but  during  the  past  few 
months  the  interest  has  revived  and  the  public  were 
anxious  to  know  the  truth.  The  object  of  this  book 
is  to  furnish  that  information.  How  well  that  object 
has  been  accomplished  the  public  must  judge.  The 
author  has  attempted  to  deal  impartially,  to  give  credit 
only  where  it  is  due,  and  censure  only  where  merited. 
The  work  is  not  designed  as  a  political  work  in  any 
sense ;  the  great  blessings  that  have  accrued  to  the 
nation  through  the  construction  of  that  great  highway 
have  carried  the  work  of  the  Credit  Mobilier  above 
and  beyond  the  sphere  of  politics,  and  it  is  hoped  that 
when  the  truth  shall  become  known  the  public  will 
not,  alone  comprehend  but  approve  that  work. 

J.  B.   C. 
Oct.  15,  1880. 


CONTENTS* 


I. 

The  Origin  of  the  Company 9 

II. 
The  Act  of  Incorporation i7 

III. 
The  Union  Pacific  Railroad  Company     ....    24 

IV. 

The  Ames  Contract  and  Assignment   ....    ^    38 

V. 
The  Assignment  to  Seven  Trustees 55 

VI. 
The  Difficulties  of  Construction 73 

VII. 
The  Disagreement  with  Mr.  McComb SS 


Vm.  CONTENTS. 

VIII. 

The  Polland  Committee 121 

IX. 
Defence  of  Oakes  Ames 186 

X. 

The  Vote  op  Censure 214 

XI. 
The  Credit  Mobilier  of  To-day 220 


The  Credit  Mobilier 

OF    AMERICA. 


I. 
THE   ORIGIN  OF   THE   COMPANY. 

COME  eight  years  ago  the  country  was  startled 
by  the  announcement  of  the  grossest  corruption 
in  our  national  legislature,  arising  out  of  the  building 
of  the  Union  Pacific  Railroad,  and  which  involved 
the  names  of  many  of  the  most  prominent  men  in 
Congress  —  men  whose  reputation  had  before  been 
above  suspicion  —  men  whose  record  had  always 
been  spotless.  The  news  came  with  terrible  force 
upon  the  community.  The  time  —  that  of  a  presi- 
dential election  —  was  one  well  calculated  to  add 
force  to  the  calamity  that  had  seemingly  overtaken 
our  country.  The  name  of  "  Credit  Mobilier,"  un- 
til then  almost  unknown  and  unheard  of  except 
among  a  few,  now  came  into  most  wonderful  promi- 
nence, and  to  this  day,  though  spoken  of  by  every- 
one, has  remained  a  mystery.  The  name,  with  its 
foreign   sound,   was    one   well    calculated   to    raise 


lO  THE    CREDIT    MOBILIER 

additional  alarm,  and  was  one  which  politicians 
could  handle  with  ease  to  instil  into  the  minds  of  the 
people  ideas  of  great  corruption.  Why  should  such 
a  name  be  selected  if  the  purposes  of  that  corpora- 
tion were  honorable  ?  and  they  who  wished  to  use 
it  lost  no  opportunity  of  doing  so  ;  and  yet  it  is  safe 
to  say  that  not  one  in  a  thousand  of  those  who  dwelt 
upon  the  infamy  of  the  Credit  Mobilier  had  the 
faintest  conception  of  what  it  really  was,  what  were 
its  objects,  or  what  it  had  accomplished.  But  that 
could  not  deter  them  in  their  argument ;  they  knew 
its  purposes  were  not  honest,  and  that  was  enough 
for  them.  It  was  as  the  cloud,  small  at  first,  but 
soon  the  tempest  that  arose  was  sufficient  to  destroy 
all  that  came  within  *ts  reach.  Reputations  which 
had  been  towers  of  strength  were  suddenly  over- 
whelmed and  covered  with  infamy ;  they  who  had 
been  the  leaders  of  public  opinion  and  of  public 
morals  were  swept  away  in  the  maelstrom  of  public 
condemnation,  never  again  to  regain  their  position. 
So  great  was  that  condemnation  by  the  people  of 
the  acts  of  these  men  that  in  an  evil  moment  they 
sought  to  regain  their  lost  positions  by  denying  all 
connection  with,  or  interest  in,  the  Credit  Mobilier; 
not  stopping  to  consider  whether  that  connection  was 
good  or  evil,  but  listening  only  to  the  clamors  of 
the  present,  they  sought  to  shield  themselves  behind 
the  armor  of  their  hitherto  unquestioned  word ;  but 
alas !  when  revelation  came,  and  that  word  was 
found  to  be  false,  the  last  defence  was  gone,  and 
they  fell.     Years  have  passed,  but  still  those  names 


OF    AMERICA.  II 

have  been  enshrouded  by  the  mystery  in  which  they 
had  fallen.  Time  has  indeed  cleared  away  much  of 
the  superstition  that  was  created  ;  but  the  people,  as 
a  mass,  remain  in  ignorance  of  the  real  object  and 
workings  of  the  Credit  Mobilier.  What  was  it  ? 
What  did  it  accomplish  ?  These  are  questions  that 
are  daily  and  hourly  asked  by  the  many.  Let  them 
but  go  out  beyond  the  Missouri,  upon  the  Great 
American  Desert  of  a  score  of  years  ago,  and  behold 
the  mighty  empire  that  has  sprung  into  existence 
there ;  behold  the  towns  and  cities  teeming  with 
population,  farms  that  supply  the  world  with  bread, 
homes  provided  with  every  comfort  and  luxury  of 
life  ;  behold  on  every  side  the  school-houses  where 
children  grow  up  amid  the  influence  of  popular  edu- 
cation, and  as  they  behold  this  happy,  contented,  and 
enlightened  people,  strong  in  their  love  of  freedom 
and  equality,  firm  in  their  faith  and  allegiance  to 
their  country — there  they  may  see  some  of  the  re- 
sults that  have  been  accomplished  through  the  influ- 
ence and  instrumentality  of  those  who  guided  and 
governed  the  Credit  Mobilier.  In  a  word,  the  Credit 
Mobilier  and  the  Union  Pacific  Railroad  Company 
were  one  and  the  same.  The  men  who  governed 
the  one,  governed  the  other.  Whatever  was  done 
under  the  name  of  Credit  Mobilier  may  not  be 
known  to  the  world  in  its  true  light,  but  we  hope 
that  the  facts  concerning  it  may  be  made  to  appear 
upon  a  perusal  of  this  work.  It  is  not  our  inten- 
tion to  accuse  or  apologize  for  any  one,  but  only 
to  set  forth  as  clearly  as  we  can  the  history  of  the 


12  THE    CREDIT    MOBILIER 

Credit  Mobilier  of  America  and  its  connection  with 
the  building  of  the  Union  Pacific  Railroad,  and  the 
relation  of  members  of  Congress  with  it. 

The  excitement  of  the  past  is  gone,  in  a  great 
measure,  and  the  people  of  the  present  are  prepared 
to  far  more  impartially  judge  of  the  merits  or  the 
evils  of  its  operation,  and  to  decide  whether  the 
actions  of  those  men  were  right  or  wrong.  That 
any  crime  was  ever  committed  was  not  a  necessary 
conclusion  to  be  drawn  from  the  revelations  that 
have  been  made  public.  Time,  and  time  only,  can 
effectually  clear  away  the  clouds  of  suspicion  that 
have  so  long  hung  over  many  a  once-honored  name, 
and  only  the  impartial  judgment  of  history  can  give 
complete  vindication  to  those  who  have  been  ac- 
cused. A  new  generation  is  fast  'appearing  upon 
the  arena  of  life,  which  will  be  prepared  to  judge 
without  the  feelings  of  prejudice  that  have,  and  may 
long  continue  to  control  public  opinion. 

Only  a  short  time  ago  there  appeared  in  the  press 
throughout  the  country  a  statement  by  the  sons  of 
Oakes  Ames  in  relation  to  the  association  of  their 
father  with  the  Credit  Mobilier,  which,  in  connection 
with  the  present  political  campaign,  has  centred 
upon  this  matter  an  interest  before  unfelt,  and  has 
created  an  almost  universal  desire  on  the  part  of  the 
public  to  know  more  concerning  the  history  of  that 
corporation.  Was  it  a  work,  as  they  allege,  of  such 
great  importance  ?  Was  it  so  largely  beneficial  to  the 
country  that,  instead  of  the  odium  and  disgrace  that 
was  cast  upon  its  principal  character,  a  monument 


OF    AMERICA.  1 3 

ghould  be  erected  to  his  memory  by  a  grateful 
people  ?  No  fact  is,  or  can  be  made  more  plain, 
than  that  no  man  had  so  much  to  do  with  the  success 
of  the  building  of  the  Union  Pacific  Railroad  as  did 
Oakes  Ames.  To  his  wonderful  exertions,  to  the 
great  sacrifices  which  he  made,  is  due  the  building 
of  that  road.  He  assumed  the  responsibility,  and 
shirked  not  the  ordeal  through  which  he  passed. 
The  road  was  completed,  the  whole  country  was 
benefited,  and  the  union  of  our  states  made  more 
strong  than  ever  before ;  but  to  Oakes  Ames  the 
result  was  disastrous  in  the  extreme.  He  was  cen- 
sured by  the  Congress  of  which  he  was  a  member, 
and  the  disgrace  which  was  placed  upon  him  ended 
his  life  in  a  few  short  months. 

A  proper  study  of  the  Credit  Mobilier  will  make 
necessary  a  consideration  of  the  circumstances  which 
called  it  into  existence  ;  and  to  do  this,  we  shall  be 
compelled  to  go  over  the  history  of  the  building  of 
the  Union  Pacific  Railroad.  The  Credit  Mobilier, 
as  it  came  into  prominence,  was  the  construction 
company  that  took  the  contract  for  building  the  road. 
Owing  to  the  same  parties  being  the  stockholders  in 
the  road  and  the  stockholders  in  the  Credit  Mobilier 
it  could  not  well  take  the  contract  direct  from  the 
Railroad  Company,  but  the  contracts  came  through 
the  intervention  of  a  third  party.  All  this  will  be 
seen  in  the  pages  which  follow,  and  need  not  be  fur- 
ther alluded  to  here.  Upon  the  organization  of  the 
Union  Pacific  Railroad  Company,  under  the  act  of 
Congress    of    1862,    and    as    amended    by    act    of 


14  THE    CREDIT    MOBILIER 

Congress  in  1864,  an  attempt  had  been  made  by  that 
company  to  construct  the  road,  which  effort  proved 
to  be  a  failure,  not  only  because  of  the  lack  of  con- 
fidence which  the  public  had  in  the  scheme,  and 
refusal  to  invest  in  the  bonds  and  stock  of  the 
company,  but  their  own  lack  of  means,  and  the 
responsibilities  which  such  construction  cast  upon 
those  who  undertook  it.  It  was  impossible  for  the 
company  to  obtain  any  individual  to  take  a  contract, 
as  no  one  was  willing  to  shoulder  so  great  an  obli- 
gation as  he  must.  It  was  therefore  necessary  that 
some  means  be  used  by  which  there  could  be 
a  combination  of  capital  and  at  the  same  time  a  limit 
to  the  liability  of  losses.  It  was  therefore  deter- 
mined to  use  the  influence  of  a  construction  com- 
pany. Questions  of  course  arose,  as  to  the  legality 
of  the  proceedings  as  contemplated,  but  under  the 
instruction  and  advice  of  the  most  eminent  counsel 
in  the  world  the  plan,  as  carried  out,  was  com- 
menced, carried  on,  and  finished. 

The  Credit  Mobilier  of  America,  which  was  the 
name  adopted  for  the  company  selected  for  the 
work,  was  fashioned  after  the  Credit  Mobilier  of 
France,  which  had  long  been  known  in  that  countr}'. 
The  Credit  Mobilier  of  France  was  a  joint  stock  com- 
pany founded  in  Paris  November  18,  1852,  under  the 
lead  of  the  brothers  Emile  and  Isaac  Pereire,  and  on 
the  principle  of  limited  liability,  for  the  transaction  of 
general  banking  business,  to  facilitate  the  construc- 
tion of  public  works,  and  to  develop  internal  indus- 
try.    Its  capital  was  60,000,000  francs,  divided  into 


OF    AMERICA.  I5 

shares  of  500  francs.  It  was  authorized  to  hold 
public  and  other  securities,  and  to  issue  bonds  of  its 
own  to  an  amount  equal  to  its  subscriptions  and 
purchases,  and  after  its  original  capital  was  all 
taken,  to  issue  bonds  to  ten  times  that  amount.  The 
profits  of  the  company  were  at  first  very  large,  a 
dividend  of  forty-one  per  cent,  was  declared  in 
1855,  and  from  that  down  to  five  per  cent.  In  1867, 
having  for  some  years  paid  only  slight  dividends 
(though  the  average  annual  dividend  for  fifteen 
years  was  seventeen  per  cent.),  it  lost  confidence, 
and  the  stock  fell  to  twenty-eight  per  cent,  of  its  par 
value,  and  the  company  soon  went  into  liquidation. 
The  managers  retired  with  immense  fortunes.  The 
High  Court  of  Appeals  decided  (August  i,  1868,) 
that  the  brothers  Pereire  and  other  directors  were 
responsible  for  their  acts,  and  that  damages  should 
be  given  to  the  stockholders.  Among  the  enter- 
prises achieved  by  the  Credit  Mobilier  of  France 
may  be  mentioned  the  construction  of  the  Paris  Gas 
Company,  the  Paris  Omnibus  Company,  the  crea- 
tion of  the  company  of  the  Grand  Hotel  du  Louvre, 
and  of  the  Maritime  Company  of  Clippers,  and  im- 
mense railway  operations  in  Austria,  Spain,  Russia, 
and  Switzerland,  together  with  heavy  loans  to 
French  railway  companies.  The  company  met 
with  much  opposition,  and  was  at  times  called  the 
greatest  gambling  house  the  world  had  ever  seen. 

The  Credit  Mobilier  of  America  was  originally  a 
company  organized  under  the  laws  of  the  State  of 
Pennsylvania,  in  the  year  1859,  ^^^  ^^^  then  known 


l6  THE    CREDIT    MOBILIER 

by  the  name  of  The  Pennsylvania  Fiscal  Agency. 
Under  this  name,  however,  it  languished,  and  was 
not,  until  shortly  previous  to  its  purchase  by  the 
principal  paities  interested  in  the  Union  Pacific 
Railroad,  even  organized  as  a  corporation.  And 
after  its  final  organization  it  never  called  any  of  its 
powers  or  functions  into  action  while  it  retained  its 
first  name.  The  powers  granted  to  it  were  of  a 
peculiar  nature,  and  were  what  were  so  much  needed 
in  the  field  in  which  it  was  soon  to  appear,  that 
every  necessary  object  was  amply  provided  for. 
That  a  full  understanding  of  its  provisions  may  be 
had,  the  act  in  full  will  be  given. 


II. 

THE  ACT  OF  INCORPORATION, 

An    Act    to    incorporate    the    Pennsylvania 
Fiscal  Agency. 

Be  it  enacted  by  the  senate  and  house  of  representa- 
tives of  the  Commonwealth  of  Pennsylvania  in 
general  assembly  7net,  afid  it  is  hereby  enacted  by 
the  authority  of  the  same  : 

Section  i.  That  Samuel  J.  Reeves,  Ellis 
Lewis,  Garrick  Mallory,  Duft'  Green,  David  R. 
Porter,  Jacob  Ziegler,  Charles  M.  Hall,  Horn  R. 
Kneass,  Robert  J.  Ross,  William  T.  Dougherty, 
Isaac  Hugus,  C.  M.  Reed,  William  Workman, 
Asa  Packer,  Jesse  Lazear,  C.  S.  Kauffman,  C.  L. 
Ward,  and  Henry  M.  Fuller,  be,  and  they  are 
hereby,  appointed  commissioners  to  receive  sub- 
scriptions and  to  organize  a  company,  by  the  name 
and  style  of  the  Pennsylvania  Fiscal  Agency  ;  and 
the  owners  of  the  shares  herein  authorized  to  be 
issued,  when  the  company  is  organized,  shall,  under 
the  name  and  style  aforesaid,  have  perpetual  succes- 
sion ;  and  may  purchase,  hold  and  acquire,  by  any 
lawful  means,  estate  real  and  personal,  and  the 
same  may  use,  sell,  lease,  let,  mortgage,  transfer, 
and  convey,  and  otherwise  dispose  of;  and  may  sue 
and  be  sued,  plead  and  be  impleaded,  contract  and 
be  contracted  with,  and  have  and  use  a  common 
seal,  and  the   same  may  change  at  pleasure ;   and 

B  17 


l8  THE    CREDIT    MOBILIER 

may  make  by-laws  and  regulations  for  the  govern- 
ment of  their  affairs,  and  may  have  and  use  all  the 
rights,  powers,  and  privileges  which  are  or  may  be 
necessary  for  them  to  have  as  a  company  incorpo- 
rated for  the  powers  herein  stated :  Provided^  that 
the  said  company  shall  not  at  any  time  hold,  in  this 
State,  more  land  than  may  be  requisite  for  the  con- 
venient transaction  of  their  business. 

Sec.  2.  That  the  purpose  of  this  act  is  to  organ- 
ize an  incorporated  company,  and  to  authorize  them, 
as  such,  to  become  an  agency  for  the  purchase  and 
sale  of  railroad  bonds  and  other  securities,  and  to 
make  advances  of  money  and  of  credit  to  railroad 
and  other  improvement  companies,  and  to  aid  in 
like  manner  contractors  and  manufacturers,  and  to 
authorize  them,  as  a  company,  to  make  all  requisite 
contracts,  and  especially  to  receive  and  hold,  on 
deposit  and  in  trust,  estate,  real  and  personal,  in- 
cluding the  notes,  bonds,  obligations,  and  accounts 
of  states,  and  of  individuals,  and  of  companies,  and 
of  corporations,  and  the  same  to  purchase,  collect, 
adjust,  and  settle,  and  also  to  sell  and  dispose  thereof 
in  any  market  in  the  United  States,  or  elsewhere, 
without  proceedings  in  law,  or  in  equity,  and  for 
such  price  and  on  such  terms  as  may  be  agreed  on 
between  them  and  the  parties  contracting  with  them, 
and  also  to  endorse  and  guarantee  the  payment  of 
the  bonds  and  the  performance  of  the  obligations  of 
individuals,  of  corporations,  and  of  companies. 

Sec.  3.  That  the  capital  stock  of  said  company 
shall  consist  of  fifty  thousand  shares  of  $100  each ; 


OF    AMERICA. 


19 


and  the  commissioners  aforesaid,  or  a  majority  of 
them,  may,  in  person  or  by  proxy,  open  books  of 
subscription  at  such  times  and  places  as  they  deem 
expedient,  and  when  five  thousand  shares  shall  have 
been  subscribed,  and  five  per  cent,  thereon  shall 
have  been  paid  in,  the  shareholders  may  elect  five 
or  more  directors  ;  and  the  directors  of  the  said  com- 
pany, when  it  shall  have  been  organized,  may,  and 
they  are  hereby  authorized  and  empowered,  to  have 
and  to  exercise,  in  the  name  and  behalf  of  the 
company,  all  the  rights,  powers,  and  privileges 
which  are  intended  to  be  herein  given ;  and  may, 
from  time  to  time,  increase  their  resources  by  bor- 
rowing money  on  a  pledge  of  their  property,  or 
without  such  pledge,  or  by  new  subscriptions,  not 
exceeding  fifty  thousand  shares  ;  and  any  citizen  or 
subject,  company  or  corporation,  of  any  State  or 
county,  may  subscribe  for,  purchase,  and  hold  shares 
of  the  said  company,  with  all  the  rights,  and  subject 
only  to  such  liabilities  as  other  shareholders  are 
subject  to  ;  which  liabilities  are  no  more  than  for  the 
payment  to  the  company  of  the  sums  due,  or  to 
become  due,  on  the  shares  held  by  them  ;  and  when 
new  subscriptions  are  made,  the  shares  may  be 
issued  at  par,  or  sold  for  the  benefit  of  the  holders 
of  the  shares  heretofore  issued. 

Sec.  4.  That  the  by-laws  shall  prescribe  the 
manner  in  which  the  officers  and  agents  of  the  com- 
pany shall  be  chosen,  and  designate  their  powers 
and  duties,  and  their  terms  of  service  and  compen- 
sation ;  and  the  principal  office  of  the  company  shall 


20  THE    CREDIT    MOBILIER 

be  in  Philadelphia,  but  the  directors,  under  such 
rules  and  regulations  as  they  may  prescribe,  may 
establish  branches  and  agencies  in  Europe  and 
elsewhere,  and  may  deal  in  exchange,  foreign  and 
domestic :  but  the  said  company  shall  not  exercise 
the  privileges  of  banking,  nor  issue  their  own  notes 
or  bills  to  be  used  as  bank-notes  or  as  currency. 

Sec.  5.  That  three-fifths  of  the  directors  of  said 
company  shall  be  citizens  of  the  United  States,  and 
the  majority  of  the  whole  shall  reside  in  this  State. 

Sec.  6.  That  the  said  company  shall  pay  to  the 
State  treasurer,  for  the  use  of  the  State,  a  bonus  of 
one-half  of  one  per  cent,  on  the  sum  requisite  to  be 
paid  in  previous  to  the  organization,  payable  in  four 
equal  annual  instalments,  the  first  payment  to  be 
made  in  one  year  after  the  payment  on  the  capital 
stock  shall  be  made,  and  also  a  like  bonus  on  all 
subsequent  payments  on  account  of  the  capital  stock 
of  the  said  company,  or  any  increase  thereof,  paya- 
ble in  like  manner ;  and,  in  addition  to  such  bonus, 
shall  pay  such  tax  upon  the  dividends  exceeding  six 
per  cent,  per  annum  as  is  or  may  be  imposed  by 
law. 

W.  C.  A.  Lawrence, 
S-peaker  of  the  House  of  Representatives, 

Jno.  Creswell,  Jr., 

Speaker  of  the  Senate, 

Approved  the  first  day  of  November,  anno  Domini 
one  thousand  eight  hundred  and  fifty-nine. 

Wm.  F.  Packer. 


OF    AMERICA.  21 

Such  is  the  original  act  of  incorporation  of  the 
famous  Credit  Mobilier  of  America,  and  under  this 
act  the  organization  of  the  company  was  concluded, 
and  officers  duly  elected.  The  first  election  of 
directors  took  place  on  the  29th  of  May,  1863,  and 
the  first  officers  of  the  corporation  were  Jacob 
Zeigler,  president ;  Oliver  Barnes,  secretary  ;  and 
Charles  M.  Hall,  treasurer.  The  history  of  the 
company  under  this  organization  was  not  of  great 
importance,  but  it  was  destined  soon  to  assume  a 
place  in  the  national  history  of  our  republic,  and 
call  to  itself  the  attention  of  the  whole  world. 

On  the  third  day  of  March,  1864,  Thomas  C. 
Durant,  then  vice-president  of  the  Union  Pacific 
Railroad  Company,  purchased  the  charter  of  the 
Pennsylvania  Fiscal  Agency  for  the  purpose  of  using 
the  company  for  the  construction  of  the  Union 
Pacific  Railroad.  But  great  changes  were  in  store 
for  the  Fiscal  Agency.  On  the  twenty-sixth  of 
March,  1864,  only  twenty-three  days  from  the  pur- 
chase, the  following  act  passed  the  Pennsylvania 
legislature  : 

An  Act   to    change    the   name   of   the    Penn- 
sylvania Fiscal  Agency. 

Be  it  enacted  by  the  senate  and  house  of  refresen- 
tatives  of  the  Commonwealth  of  Pennsylvania^ 
in  general  assembly  mct^  and  it  is  hereby  enacted 
by  the  authority  of  the  sa^nc : 

That  from  and  after  the  passage  of  this  act  "  The 
Pennsylvania     Fiscal    Agency"     shall    be    named 


22  THE    CREDIT    MOBILIER 

instead  thereof  "The  Credit  Mobilier  of  America", 
with  all  the  powers,  privileges,  and  authorities  ihey 
had  under  their  former  name,  and  be  subject  to  all 
the  restrictions  and  liabilities  to  which  they  were 
subject  under  the  same. 

Henry  C.  Johnson, 
Sj>eaker  of  the  House  of  Representatives. 

John  P.  Penney, 

Speaker  of  the  Senate. 

Approved  the  twenty-sixth  day  of  March,  anno 
Domini  one  thousand  eight  hundred  and  sixty-four. 

A.    G.    CURTIN. 

But  the  change  in  name  was  one  of  slight 
importance  with  what  followed.  Under  the  pro- 
visions of  the  charter  an  agency  was  established 
in  the  city  of  New  York,  and  when  subscriptions  to 
the  Company  were  made  it  was  upon  the  express 
condition  that  the  full  powers  of  the  board  of  direc- 
tors should  be  given  to  the  New  York  agency ;  it 
was  also  stipulated  that  a  railroad  bureau  should  be 
established  at  the  New  York  agency,  of  five  man- 
agers ;  three  to  be  directors  of  the  Company,  who 
should  have  the  sole  management  of  railway  con- 
tracts, subject  however  to  the  approval  of  the  presi- 
dent of  the  Company.  The  number  of  managers 
was  afterwards  increased  to  seven.  By  these  means 
the  Pennsylvania  corporation,  with  name  changed, 
removed    itself,   so   far  as  the   management    of    its 


OF    AMERICA.  23 

affairs  was  concerned,  entirely  from  the  state  of 
Pennsylvania,  maintaining  there  only  its  corporate 
existence,  and  with  the  extraordinary  powers  con- 
ferred upon  it  by  that  state,  took  upon  itself  the 
construction  of  the  Union  Pacific  Railroad  Com- 
pany. 

At  this  lime  the  outstanding  stock  of  the  Union 
Pacific  Railroad  Company  amounted  to  $2,180,000, 
upon  which  there  had  been  made  to  the  Railroad 
Company  a  payment  of  ten  per  cent,  or  $218,000. 
This  stock  was  purchased  by  the  Credit  Mobilier,  by 
repaying  to  the  stockholders  the  amount  advanced 
by  them  —  that  is  $218,000.  When  the  Credit 
Mobilier  purchased  this  Union  Pacific  stock  the  par 
value  of  the  shares  was  $1000.  By  act  of  Congress 
of  1864,  this  stock  was  cancelled  and  a  reissue  was 
made  to  the  stockholders  of  the  Credit  Mobilier  in 
shares  of  $100 ;  and  thus  the  stockholders  of  the 
two  corporations  became  identical ;  the  stockholders 
in  each  taking  fro  rata  with  his  interest  in  the  other, 
and  thus  the  persons  composing  one  corporation, 
who  were  to  take  a  contract  to  build  the  road,  were 
the  very  same  persons  who  held  complete  control  of 
the  corporation  for  which  the  road  was  to  be  built. 


III. 

THE  UNION  PACIFIC  RAILROAD  CO. 

T  ET  us  turn  for  a  few  moments  to  a  consideration 
-"-^  of  the  status  of  the  Union  Pacific  Railroad  at  this 
time,  and  to  do  this  it  will  be  necessary  to  investigate 
briefly  the  circumstances  which  made  that  work  a 
national  necessity.  Twenty  years  ago  had  any  one 
advocated  the  building  of  such  a  road,  he  would 
have  been  looked  upon  as  insane.  Yet  we  find  that 
the  discovery  of  gold  on  the  Pacific  coast  attracted 
there  a  large  population  who,  separated  as  they  were 
from  the  influence  of  the  rest  of  our  country,  were 
gradually  acquiring  a  sentiment  of  independence 
toward  the  common  country ;  and  the  conclusion 
was  coming  slowly  but  surely  that  their  interests, 
separated  by  so  great  a  distance  from  the  East,  could 
be  best  protected  in  a  nation  governed  by  their  own 
peculiar  laws  ;  and  at  the  breaking  out  of  the  great 
civil  war,  there  was  danger  of  our  losing  that 
valuable  territory  west  of  the  Rocky  mountains 
unless  some  means  could  be  devised  to  place  them 
in  closer  communication  with  the  East ;  and  to  do 
this  it  would  be  necessary  to  construct  a  railroad 
across  the  entire  country  and  thus,  by  placing  them 
in  easy  access  to  the    East,  strengthen   the   bonds 

24 


OF    AMERICA.  25 

of  union  between  the  Atlantic  and  Pacific  coast, 
develop  the  immense  resources  of  the  central  portion 
of  the  United  States,  and  open  a  new  route  for  com- 
merce from  the  Atlantic  and  Europe,  to  the  Pacific 
and  Asia.  This  was  an  idea  that  came  uppermost 
in  the  minds  of  the  government  during  even  the  first 
years  of  the  great  war.  Every  effort  was  made  to 
secure  this  end ;  every  means  was  tried  to  induce 
capitalists  to  embark  their  fortunes  in  the  undertak- 
ing. The  government  in  July,  1862,  incorporated 
the  company,  giving  them  vast  grants  of  land  along 
the  entire  route,  loaning  them  government  bonds  to 
a  large  amount  per  mile  of  the  road,  and  asking 
only  that  its  loan  should  constitute  a  first  lien 
upon  the  road  when  completed.  Books  for  sub- 
scriptions to  the  stock  were  opened  throughout  the 
country,  but  the  undertaking  was  too  hazardous  and 
novel  to  secure  the  co-operation  of  any  responsible 
persons,  and  during  the  following  two  years  only 
$2,180,000  of  the  stock  was  subscribed  for,  and 
only  ten  per  cent,  of  that  amount  w^as  actually  paid  in 
in  cash.  Thus  it  will  be  seen  that,  in  spite  of  all  the 
concessions  and  aid  that  the  government  tendered, 
only  $218,000  had  been  raised  to  complete  this  vast 
work.  One  restriction  which  the  government  had 
imposed,  was  that  the  capital  stock  of  the  com- 
pany, which  was  placed  at  $100,000,000,  should 
not  be  sold  at  less  than  par,  or  $100  per  share.  In 
order  to  have  enabled  any  company  to  obtain  the 
control  of  the  road  would  have  required  an  invest- 
ment of  some  $51,000,000. 


26  THE    CREDIT    MOBILIER 

In  July,  1864,  Congress  deemed  it  necessary  to 
increase  the  inducement  for  capital  to  embark  in  this 
great  enterprise,  and  therefore  it  doubled  the  land 
grant,  and  authorized  the  company  to  issue  an 
equal  amount  of  first  mortgage  bonds,  having  pre- 
cedence over  those  of  the  government ;  thus  in 
reality  reducing  the  lien  of  the  government  for  the 
bonds  advanced  by  it,  to  a  second  mortgage.  This 
course  led  to  practical  action.  In  the  meantime 
however,  attempts  had  been  made  to  build  the  Union 
Pacific  Railroad.  Immediately  after  the  first  organ- 
ization of  the  company  in  1862,  they  w^ent  to  w^ork 
and  commenced  to  build  the  road  themselves  by 
putting  men  and  laborers  on.  This  w^as  continued 
through  the  fall  and  winter  of  1863  and  1864,  by 
which  time  the  company  had  expended  upwards 
of  $600,000,  leaving  the  company  in  debt  beyond 
the  subscriptions  received  by  them,  of  $281,000,  to 
the  amount  of  more  than  $300,000.  They  found 
it  impossible  to  proceed  with  the  work ;  parties 
would  not  take  the  stock,  and  they  were  forced  to 
sell  some  of  the  materials,  cars,  &c.,  which  they 
had  bought ;  and  yet  they  did  not  entirely  abandon 
the  work. 

May  12,  1864,  a  committee  was  appointed  with 
authority  to  receive  proposals  and  let  the  work  of 
building  the  road  to  private  parties.  A  contract  was 
made  with  H.  M.  Hoxie,  August  8th,  1864,  for  the 
construction  of  one  hundred  miles  of  road,  commenc- 
ing at  the  city  of  Omaha,  at  the  rate  of  $50,000  for 
each  and  every  mile  so  completed ;    the  contractor 


OP'    AMERICA.  27 

to  receive  the  securities  of  the  company  in  payment. 
It  was  but  a  short  time  after  Hoxie  had  taken  this 
contract  that  he  found  he  could  not  go  on  with 
it,  and  he  assigned  his  contract  to  the  Credit 
Mobilier,  which  corporation  only  a  few  months 
before  had  been  obtained  by  the  principal  stockhold- 
ers of  the  Union  Pacific  Railroad  for  the  very  pur- 
pose of  taking  the  contract  of  constructing  the  road ; 
and  doubtless  the  contract  to  Hoxie  was  only  for  the 
purpose  of  having  it  assigned.  The  date  of  that 
assignment  was  March  15,  1865  ;  but  as  early  as 
October  7,  1864,  an  agreement  was  made  between 
said  Hoxie  and  Thomas  C.  Durant,  president  of  the 
Credit  Mobilier,  and  who  was  also  vice-president  of 
the  Union  Pacific  Railroad  Company,  that  such  an 
assignment  should  be  made  to  such  party  or  parties 
as  said  Durant  should  name.  One  condition  of  the 
contract  of  Hoxie  was  that  he  should  subscribe  for 
the  capital  stock  of  the  Union  Pacific  Railroad  to  the 
amount  of  $500,cxx).  Only  three  days  prior  to  the 
agreement  to  assign,  and  at  a  time  when  Hoxie  had 
virtually  abandoned  his  contract,  if  indeed  he  had 
ever  taken  it  in  good  faith,  the  following  correspond- 
ence i^^ssed  between  the  two  parties  : 

New  York,  October  4,  1S64, 

To   the   President   and   Executive    Committee    of   the 
Union  Pacijic  Railroad  Company : 

On  condition  that  your  railroad  company  will  extend 
my  contract  from  its  present  length  of  100  miles,  so  as  to 


28  THE    CREDIT    MOBILIER 

embrace  all  that  portion  of  the  road  between  Omaha  and 
the*  looth  meridian  of  longitude,  I  will  subscribe,  or 
cause  to  be  subscribed  for,  $500,000  of  the  stock  of  your 
company. 

H.  M.  HoxiE, 
By  H.  C.  Crane, 

Attorney. 

The  above  proposition  is  hereby  accepted  for  and  on 
behalf  of  the  Union  Pacific  Railroad  Company. 

John  A.  Dix, 
c.  s.  bushnell, 
Geo.  T.  M.  Davis. 

Special  Co7n'mittee. 
October  3,  1864. 

Thus  the  Hoxie  contract  was  made  to  embrace  all 
the  road  between  Omaha  and  the  one  hundredth 
meridian,  a  distance  of  247^*55^  miles,  and  three  days 
later  this  contract  was  virtually  assigned  to  the 
Credit  Mobilier,  though  in  form  the  assignment  was 
made  in  the  following  March,  and  the  Credit  Mo- 
bilier, under  this  assignment,  completed  the  contract 
on  the  fifth  of  October,  1866. 

It  was  alleged  by  some  of  the  witnesses  before 
the  Congressional  committee  that  this  contract  cost 
the  Union  Pacific  Railroad  Company  $12,974,416.24, 
and  that  it  cost^the  Credit  Mobilier  7,806,183.33, 
being  a  profit  to  the  Credit  Mobilier  of  $5,168,- 
232.91.  This  alleged  profit,  it  should  be  borne  in 
mind,  was  in  stock  and  bonds  of  the  Union  Pacific 
Railroad    Company    estimated    at    par,    while    the 


OF    AMERICA, 


29 


market  value  of  the  stock  was  only  about  thirty 
cents,  and  of  the  bonds  about  eighty-five  cents  on 
the  dollar.  The  facts  concerning  this  profit  v^ill  be 
spoken  of  further  on. 

The  contract  with  Hoxie  having  been  completed, 
a  new  agreement  was  made  by  Thomas  C.  Durant, 
vice-president  of  the  Union  Pacific  Railroad,  with  a 
Mr.  Boomer,  for  the  construction  of  1533^^  miles  of 
road  west  from  the  one  hundredth  meridian.  Under 
this  agreement  Boomer  was  to  receive  $19,500  per 
mile  for  that  portion  of  the  contract  east  of  the  North 
Platte,  and  for  that  portion  of  the  contract  west  of 
the  river  $20,000  per  mile — the  bridge  across  the 
river,  station  buildings,  equipment,  etc.,  to  be  addi- 
tional. This  contract  was  never  ratified  by  the 
company,  although  some  fifty-eight  miles  of  the 
road  had  been  completed.  It  has  been  impossible 
to  ascertain  what  these  fifty-eight  miles  cost  the 
company,  but  from  the  evidence  of  Mr.  Durant,  the 
only  evidence  attainable,  it  appears  that  it  did  not 
exceed  $27,500  per  mile,  including  station  houses, 
equipments,  etc.  Yet  in  view  of  all  this,  and  with 
the  facts  clearly  before  the  company,  on  the  fifth  of 
January,  1867,  the  board  of  directors,  by  a  resolu- 
tion, extended  the  Hoxie  contract  over  these  fifty- 
eight  miles,  thus  proposing  to  pay  to  the  Credit 
Mobilier — the  Credit  Mobilier  being  in  reality  them- 
selves— $22,500  per  mile  for  these  fifty-eight  miles 
(amounting  to  $1,345,000)  without  any  consideration 
whatever,  the  road  already  having  been  completed 
and  accepted  by  the  government. 


30  THE    CREDIT    MOBILIER 

The  following  is  a  copy  of  the  resolution,  of  date 
January  5,  1867. 

Resolved^  That  the  Union  Pacific  Railroad  Company 
will,  and  do  hereby  consider  the  Hoxie  contract  extended 
to  the  point  already  completed,  namely,  305  miles  west 
from  Omaha,  and  that  the  officers  of  this  company  are 
hereby  authorized  to  setde  with  the  Credit  Mobilier  at 
$50,000  per  mile  for  the  additional  fifty-eight  miles. 

This  resolution  was  not  carried  out  on  account  of 
the  protest  against  it  by  Thomas  C.  Durant,  al- 
though, as  will  appear  hereafter,  this  road,  fully 
constructed  and  accepted  by  the  government,  cost- 
ing in  its  construction,  according  to  the  statement  of 
Mr.  Durant,  though  no  record  of  it  could  be  found 
on  the  books  of  the  railroad  company,  complete, 
with  station  houses,  equipment,  etc.,  not  over 
$27,500  per  mile,  was  included  in  the  Ames  con- 
tract, which  will  soon  be  outlined,  and  paid  for  there 
at  the  rate  of  $42,000  per  mile. 

The  reader  will  more  clearly  understand  the  true 
relations  of  this  extension  of  the  contract,  and  the 
position  of  Mr.  Durant  concerning  it,  when  he  has 
been  informed  that,  at  about  this  time,  Mr.  Durant 
had  been  removed  from  the  board  of  directors  of  the 
Credit  Mobilier,  and  that  a  desperate  quarrel  had 
ensued,  in  which  he  openly  made  his  boasts  that  the 
Credit  Mobilier  should  never  have  another  contract 
from  the  Union  Pacific  Railroad.  The  dissensions 
that  arose  concerning  this  were  of  long  duration,  and 
entailed  immense  difficulties  upon  both  companies. 


f    UNIVERSITY  f 

^*'*«==i^lS*=**^  OF   AMERICA.  3 1 

From  the  evidence  that  has  been  produced,  it  has 
also  appeared  that  the  contract  with  Boomer,  just 
alluded  to,  never  had  any  existence,  except  in  the 
mind  o{  Mr.  Durant ;  that  the  work  upon  these  fifty- 
eight  miles  had,  in  fact,  been  performed  by  the 
Credit  Mobilier,  under  the  expectation  of  receiving 
the  contract  for  its  construction.  The  Credit  Mobil- 
ier had  gone  on  with  the  work,  had  expended  its 
money  in  its  construction,  and,  when  it  became  ap- 
parent that  the  opposition  of  Durant  and  his  party 
was  strong  enough  to  prevent  the  execution  of  the 
contract,  the  board  of  directors  of  the  railroad,  in 
doing  what  they  supposed  to  be  only  just  and  fair, 
voted  to  extend  the  Hoxie  contract  over  these  fifty- 
eight  miles,  in  order  that  the  Credit  Mobilier  might 
receive  returns  for  their  expenses.  Mr.  Durant  then 
protested  against  this  action  of  the  board,  for  the  rea- 
son, as  it  afterwards  appeared,  of  having  it  a  matter 
of  record,  to  which  he  could  subsequently  refer,  to 
show  the  purity  of  his  motives,  should  any  investiga- 
tion ever  be  made.  In  spite  of  the  failure  of  this  ex- 
tension of  the  contract,  owing  to  the  friendly  attitude 
of  the  railway  company  toward  the  Credit  Mobilier, 
and  the  promise  to  give  them  a  contract  as  soon  as. 
possible,  the  Credit  Mobilier  continued  to  construct 
the  road,  even  beyond  the  fifty-eight  miles  above 
spoken  of. 

On  the  first  of  March,  1867,  another  contract  was 
made,  for  building  the  road  west  of  the  one  hun- 
dredth meridian,  to  J.  M.  S.  Williams.  This  con- 
tract was  to  cover  26'j^t^(j  miles,  at  a  cost  of  $50,000 


32  THE    CREDIT    MOBILIER 

per  mile,  and  included  that  portion  which  was  al- 
ready completed ;  but  at  this  time  the  completed 
portion  of  the  road  west  of  the  one  hundredth  merid- 
ian, to  be  included  in  this  contract,  extended  over 
ninety-eight  and  one-fourth  miles.  This  proposi- 
tion was  accepted  by  the  company  w^ith  the  proviso  : 
"That  $7,500  per  mile  be  reserved  out  of  the  pay- 
ment." At  the  time  of  making  this  contract,  Wil- 
liams had  made  an  agreement  with  the  Credit 
Mobilier  that  he  would  assign  his  contract  to  them. 
Thus  in  reality  making  the  contract  between  the 
Union  Pacific  Railroad  and  the  Credit  Mobilier ; 
that  is,  a  contract  to  the  Credit  Mobilier,  by  which 
they  were  to  receive  payment  for  the  road  which  was 
already  completed,  at  the  same  rate  as  under  the 
Hoxie  contract.  This  contract  of  Williams  was  not, 
however,  carried  out,  owing  to  the  protest  of  Mr. 
Durant,  which  protest  can  best  be  understood  by 
reading  the  same,  which  is  in  the  words  following  : — 

Union  Pacific  Railroad  Office, 

March  27,  1867. 

To  the  Directors  of  the  Union  Pacijic  Railroad  Com^ 
pany : 
Gentlemen,  —  I  protest  against  the  resolution  of  the 
board  of  directors,  passed  at  your  last  meeting,  which  pro- 
poses to  give  the  contract  of  the  road  of  this  company, 
commencing  at  the  one  hundredth  meridian  of  longitude, 
for  the  reason  that  a  section  of  road,  already  accepted,  is 
included  in  the  contract,  and  it  does  not  appear  that  this 
company  derives  any  benefit  adequate  to  the  price  paid 
over  the  cost   of  construction,  and    does    not   in   future 


OF    AMERICA.  33 

require,  as  an  essential  point  in  the  contract,  the  completion 
of  the  road  within  the  shortest  possible  time,  and  for  other 
reasons  named  in  a  previous  protest,  in  relation  to  the 
Hoxic  contract. 

I  beg  to  call  your  attention  again  to  the  fact  that  part 
of  this  work  has  been  done  for  weeks,  and  that  contracts 
have  been  made,  and  merchandise  delivered,  for  nearly 
one  hundred  and  fifty  miles  of  road,  which  the  company 
has  paid  for,  as  shown  by  the  books. 
Respectfully, 

Thomas  C.  Durant. 

The  next  important  step  in  the  history  of  this 
transaction  is  the  Ames  contract,  the  most  important, 
perhaps,  of  any  that  was  made  during  the  construc- 
tion of  this  great  road.  But,  before  touching  on 
that,  it  may  be  well  to  dwell  a  little  on  the  relations 
of  these  different  corporations,  that  is,  the  Union 
Pacific  Railroad  and  the  Credit  Mobilier. 

It  must  be  borne  in  mind  that  the  stockholders  of 
the  one  and  the  stockholders  of  the  other  were  iden- 
tical, and  that  whatever  contracts  were  made  by  the 
one  were  known  to  the  other.  The  first  large  con- 
tract that  was  made  was  with  H.  M.  Hoxie,  and  it 
may  be  interesting  to  inquire,  who  was  Hoxie?  The 
contract  which  he  had  taken  implied  not  merely  an 
expenditure  of  many  millions  of  dollars  in  the  con- 
struction of  the  road,  which  was  to  be  repaid  him  in 
the  securities  of  the  company,  but  a  subscription  of 
$500,000  in  stock  of  the  Railroad.  These  securities 
could  not  easily  be  converted  into  cash,  even  far 
below  par,  thus  making  it  an  outlay  of  cash 
essentially. 


34  THE    CREDIT    MOBILIER 

Who  was  this  man  with  such  unlimited  means? 
The  testimony  of  Mr.  Oliver  Ames  before  the  Con- 
gressional committee  is  that  Hoxie  was  a  man  of 
no  responsibility ;  that  he  was  an  employe  of  the 
road,  and  had  charge  of  the  ferry  over  the  Missouri 
river  at  Omaha  ;  that  it  was  never  expected  that  he 
would  carry  out  the  contract ;  that  he  was  simply  a 
figure-head ;  a  party  to  whom  the  contract  was  to 
be  let  with  the  view  of  his  turning  it  over  to  some 
one  else.  That  some  one  else  proved  to  be  the  Credit 
Mobilier — the  very  parties  who  under  the  guise  of 
a  different  name,  let  the  contract  to  him.  The  same 
is  also  true  of  the  contracts  with  Boomer,  and  the 
one  made  later  with  Davis.  Was  it  all  the  same 
with  the  immense  contract  of  Mr.  Ames,  which 
was  next  to  follow?  We  shall  have  occasion  to  con- 
sider this  farther  on.  Up  to  this  time,  then,  there 
had  been  built  over  three  hundred  miles  of  this 
road,  and  the  construction  was  by  the  Credit 
Mobilier.  Where  did  this  corporation  get  all  these 
means?  They  took  their  pay  from  the  Union 
Pacific  Railroad  Company,  in  the  stocks  and  bonds 
of  the  road,  and  it  became  necessary  to  convert 
these  into  cash.  They  could  not  buy,  nor  could  the 
directors  of  the  railroad  sell  the  stock  of  the  road 
for  less  than  par ;  and  when  it  was  placed  upon  the 
market  it  would  not  bring  more  than  thirty  cents  on 
the  dollar,  and  few  sales  could  be  made  even  at  that 
or  any  other  price. 

The  road  could  not  issue  it  for  less  than  par,  and  so 
the  Credit  Mobilier  must  lose  at  least  seventy  dollars 


OF    AMERICA. 


35 


on  every  share  of  the  stock  that  they  purchased. 
It  must  appear  upon  the  records  of  the  Railroad 
Company  that  this  stock  was  paid  for  in  cash  ;  that 
was  required  by  the  articles  of  incorporation.  They 
could  not  use  it  to  pay  for  the  construction  of  their 
road.  The  act  of  incorporation  required  that  it 
should  be  sold  for  cash  at  not  less  than  par.  But 
through  the  influence  of  the  Credit  Mobilier,  they 
were  enabled  not  only  to  evade  one  of  these  require- 
ments, but  both.  They  not  only  by  this  means  used 
the  stock  and  bonds  of  the  road,  but  also  sold  the 
stock  of  the  same  far  below  par.  The  plan  of  oper- 
ations, briefly  stated,  was  that  when  any  payment 
was  to  be  made  on  account  of  work  done,  the  Rail- 
road Company  would  give  its  check  to  the  Credit 
Mobilier  for  the  amount,  and  thereupon  the  Credit 
Mobilier  would  pass  the  identical  check  back  to  the 
Railroad  Company,  receiving  from  them  the  stock 
and  bonds.  This  they  called  a  cash  transaction ; 
and  yet  the  Union  Pacific  Railroad  Company  had 
no  money,  except  as  they  sold  their  stock  or  bonds, 
or  converted  the  government  loans  into  cash.  The 
Credit  Mobilier  had  no  money,  except  as  they  sold 
these  stocks  and  bonds  ;  for  their  capital,  originally 
of  $2,500,000,  afterwards  increased  to  $3,750,000, 
was  soon  used  up  in  the  construction  of  this  road. 
But  to  all  intents  and  purposes,  the  two  companies 
were  one  and  the  same.  Even  this  position  was 
claimed  by  Thomas  C.  Durant,  the  president  of  the 
Credit  Mobilier,  and  this  was  one  ground  of  his 
objection  to  the  extension  of  the  Hoxie  contract. 


3^  THE    CREDIT    MOBILIER 

Durant  was  opposed  to  the  Credit  Mobilier,  as  a 
corporation,  having  any  further  contracts  with  the 
Railroad  Company,  and  it  was  not  strange  that  such 
should  be  the  case.  Gradually  large  amounts  of  the 
stock  of  the  Railroad  Company  had  been  absorbed 
by  the  public,  and  unless  some  means  were  taken  to 
secure  to  themselves  the  benefits  of  these  great  con- 
tracts, they  might  lose  their  advantage.  Some 
more  stringent  means  must  be  used ;  something 
must  be  done  by  which  the  control  of  the  two  cor- 
porations should  remain  undisturbed  and  secure, 
until  the  mission  of  the  Credit  Mobilier  should  be 
accomplished,  and  this  was  done  most  effectually  in 
the  next  great  move  in  the  history  of  this  road. 

After  the  proposition  of  J.  M.  S.  Williams  was 
made,  no  great  change  occurred  in  the  situation  of 
affairs.  In  spite  of  the  allegations  to  the  contrary, 
the  testimony  of  the  many  witnesses  before  the  Con- 
gressional committee  was,  that  work  was  constantly 
being  done  upon  the  road,  and  by  the  i6th  of 
August,  1867  —  the  date  of  the  Ames  contract — one 
hundred  and  thirty-eight  miles  of  the  road  west  of 
the  one-hundredth  meridian  had  been  completed 
and  accepted  by  the  government,  and  this  construc- 
tion had  been  done  at  an  expense,  on  an  average, 
including  equipments,  of  about  $27,000  per  mile,  to 
the  Company.  Still  let  us  bear  in  mind  that  the 
only  evidence  of  the  cost  of  this  portion  of  the  road 
rests  on  the  testimony  of  Mr.  Durant,  and  that  the 
books  of  the  Railroad  Company  do  not  give  any  evi- 
dence of  this  cost. 


OF    AMERICA.  37 

The  Oakes  Ames  contract,  of  which  we  shall  now 
speak,  was  for  the  construction  of  667  miles  of  road, 
commencing  at  the  one-hundredth  meridian,  at 
prices  ranging  from  $42,000  per  mile,  for  the  first 
hundred  miles,  to  $96,000  per  mile.  It  has  been 
alleged  by  some,  that  there  was  an  understanding 
between  the  officers  of  these  two  companies,  that 
this  contract,  known  as  the  Ames  contract,  should 
be  assigned  by  him  for  the  benefit  of  the  Credit 
Mobilier.  By  others  it  was  claimed  that  it  was  only 
an  implied  understanding.  But  the  facts  show  that 
reliance  was  placed  solely  upon  the  honoi;  of  Mr. 
Ames  to  make  the  assignment  for  the  benefit  of  all. 
However  this  may  be,  whether  the  understanding  was 
expressed  or  implied,  or  whether  there  was  no  under- 
standing at  all,  it  is  hardly  material ;  for  within  two 
months  from  the  signing  of  the  contract  by  Mr. 
Ames,  it  was  assigned  to  seven  persons  as  trustees, 
for  the  benefit  of  the  stockholders  of  the  Credit 
Mobilier.  We  shall  consider  the  nature  of  this 
assignment  a  little  further  on.  These  trustees  were 
among  the  principal  stockholders  and  directors  of 
the  Credit  Mobilier  and  the  Union  Pacific  Railroad 
Company,  and  under  their  direction,  that  portion  of 
the  Union  Pacific  Railroad  embraced  in  the  Ames 
contract  was  completed. 

That  this  contract  may  be  fully  understood,  as 
well  as  the  assignment  to  the  trustees,  they  will  each 
be  set  out  in  full. 


IV. 

THE  AMES   CONTRACT  AND  ASSIGN- 
MENT 

THE    OAKES    AMES    CONTRACT. 

AGREEMENT  made  this  i6th  day  of  August, 
1867,  between  the  Union  Pacific  Railroad  Com- 
pany, party  of  the  first  part,  and  Oakes  Ames, 
party  of  the  second  part,  witnesseth  — 
That  the  party  of  the  first  part  agrees  to  let  and 
contract,  and  the  party  of  the  second  part  agrees  to 
contract,  as  follows,  to  wit  : 

First,  The  party  of  the  second  part  agrees  and 
bmds  himself,  his  heirs,  executors,  administrators, 
and  assigns,  to  build  and  equip  the  following-named 
portions  of  the  railroad  and  telegraph  line  of  the 
party  of  the  first  part,  commencing  at  the  looth 
meridian  of  longitude,  upon  the  following  terms  and 
conditions,  to  wit : 

1st  100  miles  at,  and  for  the  rate  of  $42,000  per  mile. 
2d  167  miles  at,  and  for  the  rate  of  $45,000  per  mile. 
3d  100  miles  at,  and  for  the  rate  of  $96,000  per  mile. 
4th  100  miles  at,  and  for  the  rate  of  $80,000  per  mile. 
5th  100  miles  at,  and  for  the  rate  of  $90,000  per  mile. 
6th  100  miles  at,  and  for  the  rate  of  $96,000  per  mile. 


THE    CREDIT    MOBILIER.  3^ 

Second,  At  least  350  miles  shall  be,  if  possible, 
completed  and  ready  for  acceptance  before  the  ist 
day  of  January,  1868,  provided  the  Union  Pacific 
Railroad  Company  transport  the  material.  Th^ 
whole  to  be  constructed  in  a  good  and  workmanlike 
manner,  upon  the  same  general  plan  and  specifica- 
tions as  adopted  east  of  the  looth  meridian  of  longi- 
tude. The  party  of  the  second  part  shall  erect  all 
such  necessary  depots,  machine-shops,  machinery, 
tanks,  turn-tables,  and  provide  all  necessary  ma- 
chinery and  rolling-stock,  at  a  cost  of  not  less  than 
$7,500  per  mile,  in  cash,  and  shall  construct  all 
such  necessary  side-track  as  may  be  required  by  the 
party  of  the  first  part,  not  exceeding  six  per  cent,  of 
the  length  of  the  road  constructed,  and  to  be  con- 
structed under  this  contract.  The  kind  of  timber 
used  for  ties,  and  in  the  bridges,  and  in  its  prepara- 
tion, shall  be  such  as  from  time  to  time  may  be 
ordered  or  prescribed  by  the  general  agent,  or  the 
company,  under  the  rules  and  regulations,  and 
standard  as  recommended  by  the  Secretary  of  the 

Interior  of  the  date  of  February ,  1866. 

Third,  Whenever  one  of  the  above-named  sec- 
tions of  the  road  shall  be  finished  to  the  satisfaction 
and  acceptance  of  the  Government  Commissioners, 
the  same  shall  be  delivered  into  the  possession  of 
the  party  of  the  first  part,  and  upon  such  portions  of 
the  road,  as  well  as  on  that  part  east  of  the  lOOth 
meridian  now  completed,  the  party  of  the  first  part 
shall  transport,  without  delay,  all  men  and  material, 
to  be  used  in  construction,  at  a  price  to  be  agreed  upon 


40  THE    CREDIT    MOBILIER 

by  the  party  of  the  second  part,  his  heirs,  executors, 
administrators,  or  assigns,  and  the  general  agent, 
but  not  less  than  cost  to  the  party  of  the  first  part. 

Fourth,  The  party  of  the  second  part,  his  heirs, 
executors,  administrators,  or  assigns,  shall  have  the 
right  to  enter  upon  all  lands  belonging  to  the  com- 
pany, or  upon  which  the  company  may  have  any 
rights,  and  take  therefrom  any  material  used  in  the 
construction  of  the  road,  and  may  have  the  right  to 
change  the  grade  and  curvature  within  the  limits  of 
the  provisions  of  the  act  of  Congress,  for  the  tem- 
porary purpose  of  hastening  the  completion  of  the 
road,  but  the  estimated  cost  of  reducing  the  same  to 
the  grade  and  curvatures,  as  established  by  the  chief 
engineer,  or  as  approved  from  time  to  time  by  the 
company,  shall  be  deducted  and  retained  by  the 
party  of  the  first  part,  until  such  grade  and  curva- 
ture is  so  reduced. 

Fifth,  The  party  of  the  second  part,  his  heirs, 
executors,  administrators,  or  assigns,  is  to  receive 
from  the  company,  and  enjoy  the  benefit  of  all 
existing  contracts,  and  shall  assume  all  such  con- 
tracts, and  all  liabilities  of  the  company  accrued  or 
arising  therefrom  for  work  done,  or  to  be  done,  and 
material  furnished,  or  to  be  furnished,  for  or  on 
account  of  the  road  west  of  the  looth  meridian,  cred- 
itmg,  however,  the  party  of  the  first  part  on  this 
contract  all  moneys  heretofore  paid  or  expended  on 
account  thereof. 

Sixth.  The  party  of  the  second  part,  for  himself, 
his    heirs,    executors,    administrators,    and    assigns. 


OF    AMERICA. 


41 


Stipulates  and  agrees,  that  the  work  shall  be  prose- 
cuted and  completed  with  energy  and  all  possible 
speed,  so  as  to  complete  the  same  at  the  earliest 
practicable  day,  it  being  understood  that  the  speed 
of  construction  and  time  of  completion  is  the  essence 
of  this  contract,  and  at  the  same  time  the  road  to 
be  a  first-class  road,  with  equipments ;  and  if  the 
same,  in  the  opinion  of  the  chief  engineer,  is  not  so 
prosecuted,  both  as  regards  quality  and  dispatch, 
that  then  the  said  party  of  the  first  part  shall,  and 
may,  through  its  general  agent,  or  other  oflicer 
detailed  for  that  purpose,  take  charge  of  said  work, 
and  carry  the  same  on  at  proper  cost  and  expense 
of  the  party  of  the  second  part. 

Seventh.  The  grading,  bridging,  and  super- 
structure to  be  completed  under  the  supervision  of 
the  general  agent  of  the  company,  to  the  satisfaction 
of  the  chief  engineer,  and  to  be  of  the  same  char- 
acter as  to  the  workmanship  and  materials  as  in 
the  construction  of  the  road  east  of  the  looth  merid- 
ian. 

It  is,  however,  understood  that  all  iron  hereafter 
purchased  or  contracted  for,  shall  be  of  the  weight 
of  not  less  than  fifty-six  pounds  to  the  yard,  and  to 
be  fish-bar  joints. 

Eighth.  All  the  expenses  of  the  engineering  are 
to  be  charged  and  paid  by  the  party  of  the  second 
part,  except  the  pay  and  salary  of  the  chief  engmeer 
and  consulting  engineer,  and  their  immediate  assist- 
ants, and  the  expenses  of  the  general  survey  of  the 
route. 


42  THE    CREDIT    MOBILIER 

JVinth,  The  depot  buildings,  machine-shops, 
water-tanks,  and  also  bridges,  shall  be  of  the  most 
approved  pattern,  and  they,  as  well  as  the  kind  of 
masonry  and  other  material  used,  shall  be  previous- 
ly approved  by  the  general  agent  and  chief  engineer 
of  the  company,  and  all  tunnels  shall  be  of  the 
proper  width  for  a  double  track,  and  shall  be 
^arched  with  brick  or  stone,  when  necessary,  for  the 
protection  of  the  same. 

Tenth,  Payments  to  be  made  as  the  work  pro- 
gresses, upon  the  estimates  of  the  chief  engineer,  — 
in  making  which  the  engineer  shall  deduct  from  each 
section  its  proportionate  cost  of  the  equipment  not 
then  furnished,  station-buildings,  superstructure,  and 
cost  of  telegraph ;  but  all  materials  delivered  or  in 
transit  for  the  account  of  the  company,  may  be  es- 
timated for. 

Eleventh.  Payments  hereon  shall  be  made  to  the 
party  of  the  second  part,  his  heirs,  executors,  ad- 
ministrators, or  assigns,  in  cash;  but  if  the  govern- 
ment bonds  received  by  the  company  cannot  be 
converted  into  money  at  their  par  value  net,  and  the 
first  mortgage  bonds  of  the  company,  at  ninety  cents 
on  the  dollar  net,  then  the  said  party  of  the  second 
part,  hisheirs,  executors,  administrators,  and  assigns, 
shall  be  charged  herein  the  difference  between  the 
amount  realized  and  the  above-named  rates ;  pro- 
vided the  first  mortgage  bonds  are  not  sold  for  less 
than  eighty  cents  on  the  dollar ;  and  if  there  shall 
not  be  realized  from  the  sale  of  such  bonds  an 
amount  sufficient  to  pay  the  party  of  the  second  part. 


OF    AMERICA.  43 

his  heirs,  executors,  administrators,  or  assigns,  for 
work  as  stipulated  in  this  contract,  and  according  to 
the  terms  thereof,  then  such  deficiency  shall,  from 
time  to  time,  be  subscribed  by  said  party  of  the  sec- 
ond part,  his  heirs,  executors,  administrators,  or 
assigns,  to  the  capital  stock  of  said  company,  and 
proceeds  of  such  subscriptions  shall  be  paid  to  said 
party  of  the  second  part,  his  heirs,  executors,  ad- 
ministrators, or  assigns,  on  this  contract. 

Twelfth.  On  the  first  one  hundred  miles  on  this 
contract,  there  shall  be  added  to  the  equipment  now 
provided  for,  and  intended  to  apply  on  this  section, 
as  follows,  viz.  :  six  locomotives,  fifty  box-cars,  four 
passenger-cars,  two  baggage-cars,  and  a  proportion- 
ate amount  of  equipment  of  like  character,  to  be 
supplied  on  the  second  section  of  one  hundred  miles 
after  the  same  is  completed. 

Thirteenth,  The  amount  provided  to  be  expend- 
ed for  equipment,  station-buildings,  &c.,  shall  be 
expended  under  the  direction  of  the  party  of  the  first 
part,  and  in  such  proportion  for  cars,  locomotives, 
machine-shops,  station-buildings,  &c.,  and  at  such 
points  as  they  may  determine.  The  party  of  the  first 
part  to  have  the  full  benefit  of  such  expenditures 
without  profit  to  the  contractor,  or  they  may,  in 
their  option,  purchase  the  equipment,  and  expend 
any  portion  of  said  amount  provided,  at  any  point 
on  the  road  where  they  may  deem  the  same 
most  advantageous  to  the  company,  whether  on 
the  section  on  which  said  reservation  occurs  or 
not. 


44  THE    CREDIT    MOBILIER 

Fourteenth,  The  telegraph  line  is  included  here- 
in under  the  term  "  railroad,"  and  is  to  be  construct- 
ed in  the  same  manner,  and  with  similar  materials, 
as  in  the  lines  east  of  the  one  hundredth  meridian. 

The  said  parties  hereto,  in  consideration  of  the 
premises  and  of  their  covenants  herein,  do  mutually 
agree,  severally,  to  perform  and  fulfil  their  several 
respective  agreements  above  written. 

This  contract  having  been  submitted  to  the  execu- 
tive committee  by  resolution  of  the  board  of  direct- 
ors, August  i6,  1867,  and  we  having  examined  the 
details  of  the  same,  recommend  its  execution  by  the 
proper  officers  of  the  company  with  the  Hon.  Oakes 
Ames,  the  party  named  as  the  second  part. 

(Signed) 

Oliver  Ames, 
c.  s.  bushnell, 
Springer  Harbaugh, 
Thomas  C.    Durant, 

Executive   Committee  Union  Pacific 
Railroad  Company. 

This  contract  was  adopted  by  the  executive  com- 
mittee on  October  ist,  1867,  and  one  condition  of  its 
being  adopted  was  that  it  should  receive  the  written 
assent  of  all  the  stockholders  of  the  Union  Pacific 
Railroad  Company.  All  this  time  the  outstanding 
stock  of  the  Railroad  Company  was  continually  in- 
creasing, and  now  amounted  to  about  $5,000,000. 
This    had    been    sold    almost    entirely    among   the 


OF    AMERICA.  45 

Stockholders  of  the  Credit  Mobilier,  and  of  this, 
nearly,  if  not  quite,  eighty-five  per  cent,  remained 
in  the  hands  of  such  stockholders.  But  it  was 
necessary  that  the  control  should  be  so  absolutely 
in  the  hands  of  a  few  of  the  principal  stock- 
holders, that  the  management  of  the  two  concerns, 
until  the  completion  of  this  immense  contract,  should 
not  be  changed.  This  was  the  next  step  to  be 
settled,  and  it  was  settled  beyond  all  controversy. 
It  might  become  necessary  before  the  completion  of 
the  contract,  to  place  upon  the  market  large  amounts 
of  the  stock  of  the  railroad  company.  This  might 
pass  into  the  hands  of  those  hostile  to  the  present 
directors ;  might,  indeed,  end  in  dissensions,  and 
even  jeopardize  the  successful  completion  of  the 
road.  Indeed,  at  the  last  election  of  directors  pre- 
vious to  the  making  of  this  contract,  the  election  was 
a  very  close  one,  and  nearly  resulted  in  a  change  of 
directors.  The  mighty  responsibility  that  Mr.  Ames 
had  assumed  in  signing  this  contract,  was  too  great 
to  allow  anything  to  stand  between  him  and  com- 
plete success.  He  had  obligated  himself,  his  heirs, 
executors,  and  administrators,  for  more  than  $47,- 
000,000,  perhaps  the  largest  obligation  ever  assumed 
by  a  single  individual  in  the  United  States,  if  not  the 
world.  Any  error  committed  to  defeat  it,  would 
ruin  him  for  ever,  and  all  those  associated  with  him. 
Every  point  must  be  protected,  every  obstacle  must 
be  removed.  The  calculations  had  all  been  made  ; 
the  initiatory  steps  had  already  been  taken.  Every 
avenue  through  which  defeat  could  come  had  been 


46  THE    CREDIT    MOBILIER 

guarded,  and  when  the  contract  had  been  ratified  by 
the  stockholders,  the  machinery  was  all  ready  for 
operation.  An  assignment  of  this  contract  was 
made,  not  to  the  Credit  Mobilier  direct,  but  to  cer- 
tain trustees  for  the  benefit  of  the  stockholders  of  the 
Credit  Mobilier,  but  not  to  alU  but  only  such  as 
being  stockholders  in  the  Union  Pacific  Railroad, 
should  have  made  and  executed  powers  of  attorney 
or  proxy,  irrevocable,  to  said  trustees,  empowering 
them  to  vote  upon  at  least  six-tenths  of  all  the  shares 
of  stock  of  the  Union  Pacific  Railroad  Company 
owned  by  said  shareholders  of  the  Credit  Mobilier, 
and  upon  six-tenths  of  all  that  might  come  to  them 
through  any  dividend  resulting  from  said  contract. 
This  assignment  is  in  the  following  words,  viz.  :  — 

ASSIGNMENT  OF  CONTRACT  TO  T.  C.  DURANT  AND 
OTHERS. 

MEMORANDUM  of  agreement,  in  triplicate, 
made  this  15th  day  of  October,  1867,  between 
Oakes  Ames,  of  North  Easton,  Massachusetts, 
party  of  the  first  part ;  Thomas  C.  Durant,  of  the 
City  of  New  York,  Oliver  Ames,  of  North 
Easton,  Massachusetts  ;  John  B.  Alley,  of  Lynn, 
Massachusetts ;  Sidney  Dillon,  of  the  City  of 
New  York;  Cornelius  S.  Bushnell,  of  New 
Haven,  Connecticut;  Henry  S.  McComb,  of 
Wilmington,  Delaware ;  Benjamm  E.  Bates,  of 
Boston,  Massachusetts,  parties  of  the  second 
part,  and  the  Credit  Mobilier,  of  America,  party 
of  the  third  part. 


OF    AMERICA.  47 

That^  whc?'cas  the  party  of  the  first  part  has 
undertaken  a  certain  large  contract,  for  the  con- 
struction of  a  certain  portion,  therein  named,  of  the 
railroad  and  telegraph  line  of  the  Union  Pacific 
Railroad  Company,  over  the  plains,  and  through 
and  over  the  Rocky  Mountains,  which  will  require  a 
very  large  and  hazardous  outlay  of  capital,  which 
capital  he  is  desirous  to  be  assured  of  raising,  at 
such  times  and  in  such  sums  as  will  enable  him  to 
complete  and  perform  the  said  contract  according  to 
its  terms  and  conditions  ;  and 

Whereas,  the  Credit  Mobilier  of  America,  the 
party  of  the  third  part,  a  corporation  duly  established 
by  law,  is  empowered  by  its  charter  to  advance  and 
loan  money  in  aid  of  such  enterprises,  and  can  con- 
trol large  amounts  of  capital  for  such  purposes,  and 
is  willing  to  loan  to  said  party  of  the  first  pj^rt  such 
sums  as  may  be  found  necessary  to  complete  said 
contract,  provided  sufficient  assurance  may  be  made 
to  said  party  of  the  third  part  therein,  that  said  sums 
shall  be  duly  expended  in  the  work  of  completing 
said  railroad  and  telegraph  line,  and  that  the  pay- 
ments for  the  faithful  performance  of  said  contract 
by  said  railroad  company,  shall  be  held  and  applied 
to  reimburse  said  party  of  the  third  part  for  their 
loans  and  advances,  together  with  a  reasonable  in- 
terest for  the  use  of  the  money  so  loaned  and  ad- 
vanced ;  and. 

Whereas,  said  party  of  the  third  part  fully  believes 
that  said  contract,  if  honestly  and  faithfully  execu- 
ted, will  be  both  profitable  and  advantageous  to  the 


48  THE    CREDIT    MOBII.IER 

parties  performing  the  same,  are  therefore  willing 
to  guarantee  the  performance  and  execution  of  the 
same,  for  a  reasonable  commission  to  be  paid  there- 
for ;  and, 

Whereas,  both  parties  of  the  first  and  third  part 
have  confidence  and  reliance  in  the  integrity,  busi- 
ness capacity,  and  ability  of  the  several  persons 
named  as  parties  of  the  second  part  hereto,  and  con- 
fidently believe  that  said  persons  have  large  interests, 
as  well  in  the  Union  Pacific  Railroad  Company,  as 
in  the  Credit  Mobilier  of  America,  they  will  execute 
and  perform  the  said  contract,  and  faithfully  hold  the 
proceeds  thereof  to  the  just  use  and  benefit  of  the 
parties  entitled  thereto  : 

Therefore,  it  is  agreed  by  and  between  the  said 
parties  of  the  first,  second,  and  third  part  hereto,  as 
follows,  that  is  to  say  : 

That  said  Oakes  Ames,  party  of  the  first  part 
hereto,  hereby,  for  and  in  consideration  of  one  dol- 
lar lawful  money  of  the  United  States,  to  him  duly 
paid  by  the  party  of  the  second  part,  and  for  divers 
other  good  and  valuable  considerations  herein  there- 
unto moving,  doth  hereby  assign,  set  over,  and 
transfer  unto  the  said  Thomas  C.  Durant,  Oliver 
Ames,  John  B.  Alley,  Sidney  Dillon,  Cornelius  S. 
Bushnell,  Henry  S.  McComb,  and  Benjamin  E. 
Bates,  parties  of  the  second  part,  all  the  right,  title, 
and  interest  of,  in,  and  to  the  said  certain  contract 
heretofore  made  and  executed  by  and  between  the 
Union  Pacific  Railroad  Company  and  the  said  OakeS 
Ames,  bearing  date  the   i6th  day  of  August,   1867, 


OF    AMERICA.  49 

for  the  construction  of  portions  of  the  railroad  and 
telegraph  line  of  said  railroad  company,  to  which 
contract  reference  is  herein  made,  for  them,  the  said 
parties  of  the  second  part,  to  have  and  to  hold  the 
same  to  them  and  their  survivors  and  successors  for- 
ever in  trust. 

Nevertheless^  upon  the  following  trusts  and  con- 
ditions, and  limitations,  to  wit ! 

First.  That  they,  the  said  parties  of  the  second 
part,  shall  perform  all  the  terms  and  conditions  of 
the  said  contract,  so  assigned,  in  all  respects,  which 
in  and  by  the  terms  and  conditions  thereof,  is  under- 
taken and  assumed  and  agreed  to  be  done  and  per- 
formed by  the  said  party  of  the  first  part  herein 
named. 

Second.  That  they,  the  said  parties  of  the  second 
part,  shall  hold  all  the  avails  and  proceeds  of  the 
said  contract,  and  therefrom  shall  reimburse  them- 
selves and  the  party  of  the  third  part  hereto,  all 
moneys  advanced  and  expended  by  them,  or  either 
of  them,  in  executing  or  performing  the  said  con- 
tract, with  interest  and  commission  thereon,  as  here- 
inafter provided. 

Third.  Out  of  the  said  avails  and  proceeds,  to 
pay  unto  the  parties  of  the  second  part  a  reasonable 
sum  as  compensation  for  their  services  as  such  trus- 
tees for  executing  and  performing  the  terms  and 
conditions  of  this  agreement,  which  compensation 
shall  not  exceed  the  sum  of  three  thousand  dollars 
per  annum,  to  each  and  every  one  of  the  parties  of 
the  second  part. 


50  THE    CREDIT    MOBILIER 

Fourth.  To  hold  all  the  rest  and  residue  of  the 
said  proceeds  and  avails  for  the  use  and  benefit  of 
such  of  the  several  persons  holding  and  owning 
shares  in  the  Capital  stock  of  the  said  Credit  Mobilier 
of  America,  on  the  day  of  the  date  hereof,  in  propor- 
tion to  the  number  of  shares  v^hich  said  stockholders 
now  severally  hold  and  own,  and  for  the  use  and 
benefit  of  such  of  the  several  assignees  and  holders 
of  such  shares  of  stock  at  the  times  herein  set  forth, 
for  the  distribution  of  said  residue  and  remainder  of 
said  avails  and  proceeds,  who  shall  comply  with  the 
provisions,  conditions,  and  limitations  herein  con- 
tained, which  are,  on  their  part,  to  be  complied 
with. 

Fifth.  To  pay  over,  on  or  before  the  first  Wednes- 
day of  June  and  December  in  each  year,  or  within 
thirty  days  thereafter,  his  just  share  and  proportion 
of  the  residue  and  remainder  of  the  said  proceeds 
and  avails  as  shall  be  justly  estimated  by  the  said 
trustees  to  have  been  made  and  earned  as  net  profit 
on  said  contract,  during  the  preceding  six  months, 
to  each  shareholder  only  in  said  Credit  Mobilier  of 
America,  who,  being  a  stockholder  in  the  Union 
Pacific  Railroad,  shall  have  made  and  executed  his 
power  of  attorney  or  proxy,  irrevocable  to  said  sev- 
eral parties  of  the  second  part,  their  survivors  and 
successors,  empowering  them,  the  said  parties  of  the 
second  part,  to  vote  upon,  at  least  six-tenths  of  all  the 
shares  of  stock  owned  by  said  shareholders  of  the 
Credit  Mobilier  of  America,  in  the  capital  stock  of  ^ 
the  Union  Pacific  Railroad  Company,  on  the  day  of 


OF    AMERICA.  5  I 

the  date  hereof,  and  six-tenths  of  any  stock  in  said 
Union  Pacific  Railroad  Company,  he  may  have 
received  as  dividend  or  otherwise,  because,  or  by 
virtue  of  having  been  a  stockholder  in  said  Credit 
Mobilier  of  America,  or  which  may  appertain  to  any 
shares  in  said  Union  Pacific  Railroad  Company, 
which  had  been  so  assigned  to  him  at  the  time  or 
times  of  the  distribution  of  the  said  profits  as  herein 
provided  ;  and  this  trust  is  made  and  declared  upon 
the  express  condition  and  limitation  that  it  shall  not 
inure  in  any  manner  or  degree  to  the  use  or  benefit 
of  any  stockholder  of  the  Credit  Mobilier  of  America, 
who  shall  neglect  or  refuse  to  execute  and  deliver 
unto  the  said  parties  of  the  second  part  his  proxy  or 
power  of  attorney,  in  the  manner  and  for  the  purpose 
hereinbefore  provided ;  or  w  ho  shall  in  any  way,  or 
by  any  proceeding,  knowingly  hinder,  delay,  or  in- 
terfere with  the  execution  or  performance  of  the  trust 
and  conditions  herein  declared  and  set  forth. 

Then  follow  other  conditions,  that  said  trustees 
shall  act  with  the  majority  of  said  trustees  ;  that 
all  their  votes  should  be  recorded  ;  that  an  office 
should  be  kept  in  the  city  of  New  York ;  meetings 
of  said  trustees  to  be  called  by  the  secretary  ;  that 
such  secretary  should  be  appointed  by  the  trustees, 
and  should  keep  the  accounts  and  vouchers  of  all 
transactions,  his  books  to  be  open  to  the  inspection 
of  any  trustee ;  that  said  trustees  should  cause  a 
monthly  statement,  showing  amount  due  from  the 
railroad,  to  be  made  to  the  Credit  Mobilier  :  also,  in 


52  THE    CREDIT    MOBII.IER 

case  of  a  vacancy  in  the  board  of  trustees,  the  va- 
cancy to  be  filled  by  remaining  trustees ;  in  case  of 
wilful  neglect  or  fraud  of  any  trustee,  he  was  to  be 
deprived  of  his  trusteeship,  and  all  interest  through 
or  under  the  contract.  The  trustees  agreed  to  accept 
the  trust,  and  faithfully  perform  its  conditions.  The 
Credit  Mobilier  agreed  to  advance  the  necessary 
funds  at  seven  per  cent,  interest,  and  to  guarantee 
the  performance  and  execution  of  the  contract,  and 
to  hold  harmless  and  indemnify  the  parties  of  the 
first  and  second  part,  from  any  loss  through  said 
contract,  for  a  commission  of  two  and  one-half  per 
cent,  of  the  money  advanced  by  it,  and  a  further 
agreement  that  the  net  profits  of  the  work  finished 
on  the  first  hundred  miles  prior  to  January  i,  1867, 
should  be  paid  to  the  Credit  Mobilier. 

This  assignment  is  signed  by  Oakes  Ames,  by 
each  of  the  seven  trustees,  and  by  the  Credit  Mobil- 
ier of  America  by  Sidney  Dillon,  president. 

Such  is  the  contract  and  its  assignment ;  and  in 
what  respect  does  it  differ  from  the  contract  of 
Hoxie,  except  in  its  magnitude  and  difference  in  the 
parties.  The  one  was  given  to  an  irresponsible 
i  person,  who,  it  was  never  intended,  should  complete 
the  contract,  but  was  used  as  a  figure  head  to  trans- 
fer the  contract  to  the  Credit  Mobilier — in  other 
words,  back  to  the  Pacific  Railroad.  And  it  is  in- 
deed understood  and  claimed  by  many,  even  of  those 
who  have  paid  the  subject  much  attention,  that  the 
other,  though  a  man  of  large  means,  of  great  execu- 
tive ability,  took  the  contract  simply  for  the  purpose 


OF   AMERICA.  53 

of  turning  it  over  to  a  board  of  trustees  composed  of 
the  officers  and  directors  and  principal  stockholders 
of  the  two  corporations,  who  should  then  hold  the 
absolute  control  of  both  corporations,  and  who,  by 
this  means,  could  use  for  their  own  exclusive  benefit 
the  extraordinary  franchises,  and  concessions,  and 
loans  which  the  government  had  made  to  push 
forward  the  building  of  the  Pacific  Railroad ;  but 
this  is  a  position  which  cannot  be  maintained  by, 
any  one  who  will  give  the  subject  a  careful  con- 
sideration, and  try  to  arrive  at  a  true  understanding 
of  this  contract  and  its  assignment. 

We  are  ready  to  affirm  —  and  we  believe  this 
contract  and  assignment  will  bear  us  out — that 
the  Credit  Mobilier,  as  a  corporation,  had  nothing 
whatever  to  do  with  this  contract  or  its  execution. 
We  have  before  alluded  to  the  hostility  of  Mr. 
Durant  toward  the  Credit  Mobilier.  No  contract 
could,  by  reason  of  that  hostility,  be  made  to  the 
Credit  Mobilier,  or  to  any  one  who  would  assign 
it  to  that  company.  As  matters  were  standing,  the 
construction  of  the  road  must  soon  be  brought  to  an 
end.  The  Credit  Mobilier  had  indeed  been  con- 
structing a  part  of  the  road  without  any  contract, 
but  this  was  a  dangerous  proceeding,  and  might  end 
in  total  loss.  Efforts  were  made  to  get  some  con- 
tractor to  take  a  contract,  but  in  all  the  country 
there  was  no  man  so  foolish.  At  last  effiDrts  for  a 
compromise  were  made,  and  rather  than  see  the 
road  fail,  rather  than  see  that  project,  to  which  his 
life    was    devoted,    brought    to   an  inglorious    end, 


54  THE    CREDIT    MOBILIER 

Mr.  Ames  was  prevailed  upon  to  take  the  contract. 
In  taking  it  his  motives  were  high,  honorable,  and 
patriotic.  The  road  was  a  public,  a  national  neces- 
sity. To  falter  now,  the  consequences  might  be  the 
abandonment  for  generations  of  any  attempt  to  cross 
the  continent  by  means  of  a  railroad.  Mr.  Ames 
considered  well  the  responsibility  he  assumed.  He 
believed  also  that  by  proper  management  the  road 
could  be  built  at  the  contract  price,  so  that  a  small 
profit  could  be  realized  to  the  contractor,  and  he 
firmly  believed  that  when  the  road  was  once  com- 
pleted the  increase  of  business  along  its  line  would 
make  its  securities  valuable.  There  was  one  con- 
dition he  imposed,  and  that  was  that  the  contract 
must  receive  the  assent  of  every  stockholder  of  the 
Union  Pacific  Railroad,  in  writing  When  the 
question  was  raised  as  to  the  manner  in  which  this 
mighty  contract  was  to  be  executed,  Mr.  Ames 
insisted  that  he  must  take  the  contract  untrammeled 
by  any  promise,  agreement,  or  understanding.  He 
could  tell  no  man  what  he  would  do.  "  Of  course," 
said  Mr.  Ames,  "I  must  have  associates,  but  no 
man  shall  be  wronged,  no  one  shall  be  deprived  of 
his  rights.  I  am  an  honest  man,  and  I  will  see  that 
every  man  is  protected." 


V. 

77^5*  ASSIGNMENT  TO  SEVEN  TRUS- 
TEES. 

T)  OTH  sides  to  the  controversy  which  made  this  con- 
-*-^  tract  necessary,  placed  the  utmost  confidence  in 
Mr.  Ames,  and  in  the  integrity  of  his  character,  and 
were  sure  that  the  rights  of  all  would  be  protected. 
Thus  Mr.  Ames  took  this  great  contract,  with  no  agree- 
ment, understanding,  or  promise.  He  made  none, 
and  none  was  exacted  of  him.  Yet  all  felt  a  confi- 
dence in  him  that  the  contract  would  be  so  used  that 
the  interests  of  all  should  be  guarded.  The  contract 
properly  belonged  to  the  Credit  Mobilier,  which  had 
commenced  the  construction  of  the  road,  and  had 
continued  it  up  to  the  date  of  the  contract.  Its  entire 
capital  had  been  absorbed  in  that  work,  and  not  one 
cent  of  returns  had  been  made  to  the  stockholders. 
What  profit  there  was,  if  any  had  been  made,  had 
been  misappropriated  by  those  who  had  for- 
merly held  the  management.  $3,750,000,  which 
those  stockholders  had  paid  for  the  capital  stock  of 
that  company,  were  now  in  the  Union  Pacific  road- 
bed. That  road  had  reaped  the  benefit,  while  the 
men  who  paid  the  money  had  nothing  to  show  for  it. 
This  was  the  view  which  Mr.  Ames  took,  and  he 

55 


56  THE    CREDIT    MOBILIER 

determined  that  this  contract  should  inure  to  their 
benefit — to  them  as  individuals  and  not  as  a  corpora- 
tion. He  therefore  made  his  assignment  to  seven 
trustees  for  their  benefit,  provided  they  would  share 
with  him  the  responsibility  of  the  contract ;  and  pro- 
vided also  that  they  were  holders  of  Union  Pacific 
stock.  It  was  an  assignment  for  the  benefit  of  cer- 
tain specified  individuals,  those  individuals  being 
also  stockholders  in  the  Credit  Mobilier.  This  term 
was  used  to  designate  them,  because  of  its  simplicity, 
and  had  no  relation  to  the  corporation  of  which  they 
were  members.  If,  instead  of  the  fourth  and  fifth 
clauses  of  the  declaration  of  trust  contained  in  the 
assignment  above,  the  wording  had  been  "To  hold 
all  the  rest  and  residue  of  the  said  proceeds  and 
avails  for  the  use  and  benefit  of  (here  naming  each 
individual  stockholder  of  the  Credit  Mobilier  by 
name),  in  the  proportion  following,  to  wit,  to  (here 
designate  the  proportion  which  each  was  to  have,  it 
being  the  same  proportion  as  the  stock  owned  by  him 
bore  to  the  entire  capital  stock  of  the  Credit  Mobilier, 
&c.")  By  doing  this  the  exact  object  desired  would 
have  been  obtained,  and  the  connection  with  the  Credit 
Mobilier — unfortunate  as  it  proved  to  be — would 
have  been  avoided.  Then  could  have  followed  the 
condition  about  giving  proxies,  and  everything  would 
have  been  precisely  as  it  was,  without  the  compli- 
cations that  afterwards  arose.  At  this  time  there 
were  about  one  hundred  stockholders  in  the  Credit 
Mobilier,  and  so  for  convenience  the  designation  of^ 
"  stockholders  in  the  Credit  Mobilier  "  was  used. 


OF    AMERICA.  57 

Upon  these  grounds  it  is  that  we  affirm  that  the 
Credit  Mobilier  had  nothing  whatever  to  do  with  the 
Ames  contract.  This  position  has  also  been  affirmed 
by  the  Supreme  Court  of  Pennsylvania,  where  the 
Credit  Mobilier  was  sued  for  taxes  to  the  amount  of 
$1,200,000,  upon  the  dividends  declared  by  the 
trustees,  and  it  was  there  decided  that  the  Credit 
Mobilier  had  declared  no  dividends.  Could  stronger 
arguments  be  used  than  that  the  State  of  Pennsyl- 
vania decided  against  its  own  claim  to  the  amount 
of  more  than  a  million  dollars? 

Upon  this  assignment  being  made,  the  Union 
Pacific  Railroad  Company  released  Mr.  Oakes  ) 
Ames  from  any  personal  liability  under  the  con- 
tract he  had  signed.  The  great  liability  which  '. 
Mr.  Ames  assumed,  in  less  than  two  months  had  ' 
entirely  vanished,  and  again  he  was  as  free  as  before 
he  signed  it.  Under  that  contract  he  incurred  no 
liability  ;  he  did  not  even  enter  upon  the  fulfilling  of 
the  contract,  but  for  these  two  months  it  lay  dormant ; 
in  fact,  for  nearly  this  entire  time  it  was  inoperative. 
It  needed  the  written  assent  of  all  the  stockholders 
of  the  Union  Pacific  Railroad,  and  this  assent  was 
not  obtained  until  after  the  first  of  October.  So  that 
in  fact  and  in  reality,  the  personal  liability  of  Oakes 
Ames  under  the  contract  amounted  to  nothing. 
There  was,  however,  a  difl^erence  in  one  respect 
which  should  be  noticed,  and  which,  indeed,  has  a 
very  powerful  bearing  upon  not  only  the  liability  of 
Oakes  Ames,  but  of  every  beneficiary  under  the 
contract.     One  condition   which   Mr.   Oakes  Ames 


58  THE    CREDIT    MOBILIER 

insisted  upon  before  he  would  accept  the  contract 
was,  that  it  should  receive  the  assent  in  writing  of 
every  stockholder  of  the  Union  Pacific  Railroad. 
This  was  obtained.  He  then  assigned  the  contract  to 
the  trustees,  and  then  the  agreement  which  all  the 
stockholders  in  both  companies  made,  made  them 
each  individually  liable  under  that  contract.  Though 
Oakes  Ames  was  in  reality  released  from  personal 
liability  under  the  contract  by  the  Union  Pacific  Rail- 
road Company,  upon  his  assigning  the  contract,  he, 
in  common  with  all  others,  again  took  that  liability 
upon  himself,  and  no  man  bore  the  brunt  of  that  lia- 
bility more  than  did  he.  His  whole  immense  fortune 
was  involved  in  the  undertaking ;  and  it  came  near 
wrecking  him  financially.  He  was  at  one  time 
forced,  by  reason  of  the  responsibility  under  this  con- 
tract, and  his  investments  therein,  to  suspend  pay- 
ment in  his  regular  business,  and  ask  for  an  extension 
by  his  creditors.  His  liabilities  at  that  time  amount- 
ed to  some  $8,000,000.  But,  with  a  courage  seldom, 
if  ever  equalled,  he  continued  on  in  this  enterprise, 
and  at  last  was  successful,  and  saw  the  road  com- 
pleted. In  time  all  his  creditors  were  fully  satisfied. 
From  this  time  forth  the  control  of  the  Union  Pa- 
cific Railroad  passed  from  the  hands  of  its  directors 
and  officers,  into  the  hands  of  the  seven  trustees  who 
were  constructing  the  road,  and  into  their  hands, 
irrevocable  powers  of  attorney  had  been  given  by  the 
stockholders  to  vote  upon  their  shares,  thus  enabling 
them  to  hold  absolute  control  so  long  as  they  should 
desire.  Certainly  they  were  not  long  in  understanding 


OF   AMERICA.  59 

the  position  in  which  they  were  now  placed.  In 
fact,  had  they  not  long  worked  for  this  ?  Had 
they  not,  by  means  of  the  influence  of  the  name 
of  Oakes  Ames  among  the  stockholders,  obtained  it? 
The  very  day  following  the  assignment,  these  trus- 
tees entered  into  an  agreement  among  themselves 
whereby  they  bound  themselves  to  vote  not  only  with 
their  own  shares,  but  with  the  proxies  held  by  them 
for  such  directors  of  the  Union  Pacific  Railroad  as 
should  be  nominated  by  a  majority  of  the  then  exist- 
ing board  of  directors,  not  appointed  by  the  presi- 
dent, and  no  others ;  and,  in  case  of  a  failure  to 
nominate  by  such  directors,  then  to  vote  for  the 
elected  members  of  the  existing  board,  and,  in  case 
any  of  said  trustees  should  refuse  to  stand  by  this 
agreement,  he  was  to  forfeit  all  claims  for  benefits 
or  dividends  under  the  contracts  assigned  to  them. 

Though  Mr.  Oakes  Ames  had  assigned  his  entire 
contract ;  though  thereafter  he  had  no  more  to  do 
with  the  contract  than  any  other  stockholder  of  the 
Union  Pacific  Railroad  Company  ;  though  he  had 
no  special  authority,  he  was  not  without  interest  by 
any  means,  for  he  was  one  of  the  largest  stock- 
holders in  Cc^ch  corporation,  and  upon  its  success 
depended  its  profits.  His  liability  as  a  contractor 
had  ceased  (though  immediately  assumed  in  anoth- 
er form),  yet  his  influence  was  in  a  great  measure 
necessary  for  the  successful  completion  of  the  con- 
tract. Under  this  contract  no  work  had  been  done 
prior  to  its  assignment  to  the  trustees,  yet  work  had 
been  progressing,  and  the  road  was  being  pushed 


6o  THE    CREDIT    MOBILIER 

forward  rapidly  by  the  Credit  Mobilier ;  and  at  the 
date  of  the  assignment — which  is  essentially  the 
date  of  the  ratification  of  the  contract  by  the  stock- 
holders— there  had  been  238  miles  of  the  road 
completed,  w^hich  were  embraced  in  this  contract  — 
in  other  words,  more  than  one-third  of  the  whole 
contract  was  completed  before  a  stroke  had  been 
done.  Yet  these  238  miles,  which  had  been  com- 
pleted at  a  cost  not  exceeding  $27,500  per  mile  (in- 
cluding equipment)  to  the  company,  were  paid  for  to 
the  trustees  at  a  rate  of  over  $42,000  per  mile.  This 
was  a  profit  —  if  such  a  name  is  applicable  to  it — of 
between  $2,500,000  and  $3,000,000  under  this  con- 
tract for  which  no  work  was  needed  or  ever  done, 
though  all  this  work  had  been  done  by  the  Credit 
Mobiler,  or  more  strictly  speaking,  by  the  stockhold- 
ers of  the  Credit  Mobiler. 

In  less  than  two  months  after  the  assignment  (viz., 
December  12,  1867,)  the  first  dividend  was  de- 
clared, which  was  $2,244,000  in  first  mortgage 
bonds  of  the  Union  Pacific  Railroad  Company,  and 
$2,244,000  in  the  stock  of  the  company.  Consider- 
ing the  bonds  at  that  time  worth  eighty-five  cents, 
and  the  stock  thirty  cents  on  the  dollar,  would 
make  the  actual  cash  value  of  that  dividend  at 
the  time  it  was  declared,  about  $2,580,600;  and 
this,  beyond  all  question,  is  the  extra  compen- 
sation paid  to  these  trustees  on  account  of  the 
road  already  completed,  and  to  that  extent  a  pay- 
ment to  the  stockholders  of  the  Credit  Mobiler  for*" 
the  work  done  by  them  without  a  contract.     From 


OF    AMERICA.  6l 

this  amount  there  should  be  deducted  $1,104,000 
paid  by  the  trustees  to  the  Credit  Mobilier  on 
account  of  the  road  included  in  this  contract,  which 
had  been  constructed  by  that  Company.  These 
trustees  continued  to  work  under  this  Ames  con- 
tract until  it  was  completed.  The  work  was  pushed 
forward  with  wonderful  rapidity,  and  as  a  natural 
consequence  greatly  increased  the  cost  of  construc- 
tion. It  was  asserted  by  one  of  the  trustees  that  had 
the  full  time  been  taken  in  which  to  complete  the 
road,  it  could  have  been  built  at  scarcely  more  than 
one-half  what  it  did  cost. 

Great  stress  has  been  laid  on  the  fact  that  at  the 
time  the  Ames  contract  was  made,  the  estimated  cost 
of  building  the  road  over  the  mountains  was  greatly 
in  excess  of  what  it  really  cost  on  account  of  the 
discovery  of  a  new  route  which  was  much  more  easy 
and  far  less  expensive.  This  is  set  forth  as  one 
excuse  why  the  Ames  contract  was  to  include  all 
from  the  looth  meridian  ;  that  by  so  doing  the  con- 
tract would  be  less  for  the  whole  distance,  and  thus 
the  average  expense  would  be  the  same,  for  there 
being  a  large  profit  upon  the  first  portion,  the  con- 
tractor could  afford  to  take  a  less  sum  per  mile  for 
the  more  difficult  portion.  But  it  is  a  fact  well  set- 
tled that  the  very  route  upon  which  the  road  was 
built  was  known  months  before  that  contract  was 
given,  and  the  advantages  of  that  route  were  all 
known  to  the  contractor,  and  were  considered  by 
him  in  his  calculations,  and  in  making  these  calcula- 
tions no  one  believed  that  the  more  difficult  portions 


62  THE    CREDIT    MOBILIER 

of  the  road  could  be  built  for  the  price  named  in 
the  contract,  and  had  not  this  portion  been  included, 
the  average  for  the  balance  must  have  been  neces- 
sarily largely  increased.  But  there  remains  the 
other  fact,  which  should  not  be  forgotten,  that  the 
completed  work  included  in  this  contract  had  been 
performed  by  the  Credit  Mobilier ;  and  by  the  con- 
tract and  its  assignment,  the  trustees  were  to  repay 
the  Credit  Mobilier  for  this  work,  which  was  done, 
and  out  of  the  money  so  received  the  Credit  Mobilier 
declared  the  only  dividend  it  ever  made. 

It  is  claimed  that  the  plan  of  letting  this  contract 
to  Mr.  Ames,  including  as  it  did  the  finished  por- 
tion, ignored  the  right  of  the  government  in  the 
premises,  and  was  calculated  to  destroy  all  that  in- 
terest. The  government  had  given  them  the  right 
of  way,  had  granted  them  large  subsidies  of  money 
for  every  mile  of  road  to  be  built,  and  had  consented 
to  take  a  second  mortgage  as  security ;  had  given 
them  the  privilege  of  creating  a  debt  equal  to  the 
amount  advanced  by  the  government,  which  should 
have  precedence  ;  and  in  return  asked  that  a  cer- 
tain proportion  of  the  net  profits  should  go  to  the 
government,  and  that  the  government  should  have 
the  right  to  regulate  the  fares  when  the  net  profits 
should  exceed  a  certain  per  cent,  on  the  cost  of  the 
road,  and  that  by  this  vast  increase  in  the  cost  of  the 
road  the  interest  ol  the  government  was  practically 
destroyed,  and  the  claim  to  regulate  tariffs  made  of 
no  effect.  But'we  shall  have  occasion  to  consider 
this  right  of  the  government  further  on. 


OF    AMERICA.  63 

The  Ames  contract  was  finished,  but  in  the  mean- 
time another  contract  had  been  let  and,  in  a  few  days 
after  it  was  made,  was  assigned  to  these  same  trusr  / 
tees.  This,  the  Davis  contract,  was  for  the  balance 
of  the  road,  from  the  end  of  the  Ames  contract,  and 
embraced  about  125-i^A  miles,  and  it  was  upon  the 
same  terms  and  conditions  as  the  Ames  contract. 
Under  these  three  contracts  was  constructed  the 
entire  road. 

The  difficulties  which  were  surmounted  were  such 
as  to  attract  the  attention  of  the  world.  It  was  the 
greatest  enterprise  ever  undertaken  in  America.  It 
was  the  first,  and  public  opinion  must  be  controlled, — 
public  confidence  must  be  secured  ;  the  capitalists  of 
the  country  must  be  induced  to  put  their  money  into 
an  enterprise  where  failure  was  openly  predicted 
and  by  the  many  firmly  believed ;  there  was  no  se- 
curity except  the  obligation  of  the  seven  trustees,  and 
the  bonds  of  the  government,  which  then  were  below 
par.  It  was  a  question  open  to  discussion  whether 
the  road  would  pay  even  if  completed.  The  debt 
that  must  be  created  was  large,  and  seemingly  im- 
possible to  meet ;  the  rate  of  interest  was  great,  and 
would  eat  up  all  the  earnings  of  the  road.  The  op- 
erating expenses  must  necessarily  be  large.  The 
local  business  of  the  road  could  not  be  depended 
upon  for  any  considerable  income,  until  the  country 
through  which  it  passed  should  become  settled,  and 
that  country  was  then  believed  to  be  but  little  better 
than  a  desert,  where  nothing  but  the  hardy  sage- 
bush    would    grow,    or    else    it   was    through    the 


64  THE    CREDIT    MOBII.IER 

mountains,  where  even  man  could  not  live.  Indeed 
the  undertaking  w^as  a  hazardous  one  ;  indeed  it  was 
enough  to  appall  the  stoutest  heart,  and  to  frighten 
the  most  reckless  capitalist.  Yet  these  men  were 
not  to  be  diverted  from  their  course ;  they  had 
embarked  their  names,  their  fortunes  upon  its 
accomplishment,  and  the  most  discouraging  events 
could  not  make  them  abandon  the  object  of  their 
lives. 

Though  they  were,  many  of  them,  men  of  immense 
resources,  though  their  credit  had  stood  in  business 
circles  the  very  highest,  they  soon  found  their  credit 
in  many  places  badly  shaken,  and  their  ability  to 
carry  on  the  mighty  work  greatly  impeded.  They 
were  compelled  to  take  the  securities  of  the  road  and 
to  hold  them,  because  no  market  could  be  found  for 
them  ;  they  were  forced  to  borrow  money  at  most 
ruinous  rates  of  interest ;  they  were  forced  to  place 
the  bonds  of  the  road  in  pledge  for  the  necessar}'^ 
capital,  and  that  at  times  at  the  rate  of  three 
dollars  to  one.  It  needed  the  most  watchful  care, 
the  greatest  ability  in  the  country,  and  the  most 
extraordinary  energy  to  carry  it  on,  and  all  this 
it  had.  In  spite  of  all  discouragements  the  road 
was  completed — completed  seven  years  before  the 
time  limited  —  and  it  became  at  once  a  national 
highway ;  the  country  through  which  it  passed  was 
found  to  be,  a  fair  proportion  of  the  distance,  the 
nearest  approach  to  the  Garden  of  Eden  now  found 
on  earth.  Towns  and  cities  sprang  up  along  the  Ime. 
Territories  became  states,  and  a  happy,  prosperous 


OF    AMERICA.  65 

people  swarmed  over  those  once  desolate  plains 
to  tind  there  homes  of  contentment  and  peace. 
Business  was  greatly  increased,  far  beyond  even 
the  expectation  of  its  builders ;  but  there  was  yet 
much  to  do. 

Much  capital  was  needed,  and  it  was  necessary 
that  the  men  who  had  risked  their  all  in  its  com- 
pletion should  now  stand  ready  to  aid  it  still  with  their 
means.  Even  with  the  success  already  attained,  had 
the  support  of  these  men  been  removed,  the  road 
would  have  become  bankrupt,  and  the  millions  that 
had  been  spent  in  its  construction  would  have  been 
wasted.  At  the  completion  of  the  road  the  company 
found  itself  $6,000,000  in  debt,  and  this  burden  must 
fall  upon  individuals,  to  be  followed  by  others  neces- 
sary to  keep  the  road  in  active  operation  until  a  busi- 
ness was  created  affording  revenue  sufficient  to  meet 
the  running  expenses  and  interest,  and  this  burden 
was  sufficient  to  destroy  nearly  all  profit  derived  from 
the  building  of  the  road. 

What  was  that  profit?  Was  it  so  great  as  to  alarm 
any  thinking  mind?  Was  it  such  as  to  call  forth  the 
criticism  of  the  public  ?  Was  it  such  as  to  convince 
the  world  that  great  corruption  had  been  used  to  se- 
cure it?  In  estimating  profit,  we  should  always 
consider  the  outlay,  and  the  risk  assumed.  In  con- 
sidering this  portion  of  the  subject,  the  figures  will 
be  taken  mostly  from  the  testimony  brought  out  by 
the  Congressional  committee  of  investigation,  in 
1873.  From  the  report  of  the  committee  it  appears 
that 


66 


THE    CREDIT    MOBILIER 


THE    COST    TO    THE    RAILROAD    COMPANY    OF 


The  Hoxie  contract  was  -  -  -  -  $12,974,416  24 
Ames  contract  -----  57,140,102  94 
Davis  contract      -----     23,431,768  10 

Making  total  cost      -----  $93,546,287  28 

THE    COST    TO    THE    CONTRACTORS    OF 

The  Hoxie  contract  $  7,806,183  33 
Ames  contract  27,285,141  99 
Davis  contract      15,629,633  62    50,720,95$  94 

Leaving  a  profit  to  contractors     -  $42,825,328  34 
In  addition  to  this,  there  v^as  a  pay- 
ment to  the  Credit  Mobilier  on  ac- 
count of  fifty-eight  miles,    -     -     -       1,104,000  00 

Making  the  total  profit  -     -     -     -  $43,929,328  34 

This  profit,  it  should  be  remembered,  includes  the 
payments  of  bonds  and  stock  at  par,  and  not  at  its 
cash  value.  It  is  therefore  necessary  to  ascertain 
the  proportionate  value  of  each  of  this  class  of  pay- 
ments in  order  to  ascertain  w^hat  was  the  cash  profit 
in  the  construction  of  the  road.  The  books  of  the 
company  show  that  the  profits  under  the  Ames  and 
Davis  contracts  were  composed  of 
$3,777,000  first  mortgage  bonds,  worth  ninety  cents 

on  the  dollar. 
$4,400,000    certificates   for  first   mortgage   bonds, 
afterwards  converted  into  income  bonds  at  above 
par. 


OF    AMERICA.  67 

$5, 841, OCX)  income  bonds,  at  sixty. 

$24,000,000  stock  of  Union  Pacific  Railroad    Co. 

$2,346,195  cash. 
The  stock  of  the  Union  Pacific  Railroad,  as  has 
been  stated  above,  was  worth  about  thirty  cents  on 
the  dollar.  Sometimes  the  price  would  advance  and 
sometimes  would  fall,  but  for  all  their  calculations 
the  average  price  was  thirty  cents. 

Upon  this  basis  the  actual  cash  profits  of  the 
Ames  and  Davis  contracts  would  be  as  follows : 

$3,777,000  first  mortgage  bonds  at 

ninety    --- $3»399'300  oo 

$4,400,000  certificates  for  first  mort- 
gage bonds      -------  4,425,000  00 

$5,841,000  income  bonds  at  sixty      -  3,504,000  00 

$24,000,000  stock  at  thirty       -     -     -  7,200,000  00 

$2,346,195  cash 2,346,195  00 

Making  a  total  cash  profit     -     -     $20,874,495  00 

The  profits  on  the  Hoxie  contract  consisted  of 
$1,125,000  first  mortgage  bonds  at  eighty-five,  and 
$5,147,232  71  stock  at  thirty,  and  making  the  same 

reduction  as  above,  we  have  — 
$1,125,000  bonds  at  eighty-five     -     -      $956,25000 
$5,147,232  71  stock  at  thirty  -     -     -     1,544,169  81 

As  the  cash  profit  of  the  Hoxie  cont'ct  2,500,419  81 
And  if  to  this  is  added  the  profits  as 

above       ---------  20,874,495  00 

Making  total  profit  of  the  whole  road  23,374,914  81 


68  THE    CREDIT    MOBILIER 

In  this  connection  attention  is  called  to  the  aid 
which  the  government  extended  to  the  road,  in  its 
own  bonds,  and  in  the  first  mortgage  bonds  which 
the  government  had  allowed  the  road  to  issue  and 
to  make  a  lien  upon  the  road  prior  to  the  claim  of 
the  government. 

First  mortgage  bonds  issued-     -     -  $27,213,000  00 
Sold  at  a  discount  of    -     -     -     -     -       3,494,991   23 

Net  proceeds -  $23,718,008  77 

Government  bonds  issued       -     -     -$27,236,512  00 
Sold  at  a  discount  of    -     -     -     -     -  91,348  72 

Net  proceeds  ------     -$27,145,163  28 

The  net  proceeds  of  the  two  classes 

of  bonds     - --  $50,863,172  05 

We  have  seen  that  the  actual  cost  of 

the  whole  road  to  the  contractors 

was  ----------     50,720,958  94 

Value  of  the  bonds  over  cost  of  con 

struction      --------  142,213    11 

In  other  words,  the  net  proceeds  of  the  govern- 
ment and  first  mortgage  bonds  were  sufficient  to  pay 
for  the  construction  of  the  entire  road,  and  from  the 
stock,  the  income  bonds,  and  land  grant  bonds,  the 
contractors  received  in  cash  value  at  last  $23,000,000 
as  profit,  being  about  forty-eight  per  cent,  of  the 
whole  cost.  This  profit,  which  certainly  is  a  large 
one  in  whatever  light  it  may  be  considered,  it  is 
claimed  by  the  directors  of  the  Credit  Mobilier  'is 
not  the  correct   statement  of  the  case,  but  that  the 


OF   AMERICA.  69 

actual  profit  received  by  them  is  far  less  than  this — 
that  it  did  not,  in  fact,  aggregate  more  than  about 
fifteen  per  cent.  ;  but  how  any  such  conclusion  can 
be  reached  from  the  figures  presented  by  the  corn- 
mittee  is  far  more  than  the  ordinary  intellect  can 
understand.  The  claim  is  made,  and  with  some 
force,  that  at  times  the  stock  which  they  took  was 
worth  far  less  than  thirty,  and  that  sales  were  made 
even  as  low  as  nine  cents  on  the  dollar ;  but  even 
considering  that  the  entire  issue  had  been  sold  at 
that  rate  the  cash  profit  would  have  reached  at  least 
$16,000,000,  or  about  thirty-two  per  cent,  on  the  cost. 
But  the  evidence  of  all  parties  was  that  the  average 
net  price  of  the  stock  was  thirty  cents  on  the  dollar. 
This  is  the  reasoning  of  the  committee  on  investi- 
gation in  Congress,  but  it  seems  to  us  as  a  most  wil- 
ful perversion  of  figures,  —  an  unauthorized  use  of 
those  figures  to  prove  a  proposition  which  had  been 
in  their  minds  at  the  start,  and  which  they  were  de- 
termined to  maintain  and  prove,  it  mattered  not  by 
what  means.  This  estimate  made  by  the  committee 
leaves  out  from  the  cost  of  the  road  a  large  number 
of  items,  which  were  expenditures  of  the  Credit 
Mobilier,  but  which  might  not  enter  into  an  estimate 
of  the  "  actual  cost "  of  building  the  road.  Every 
man  who  has  done  any  business  knows  full  well  that 
there  are  always  expenses  that  could  not  be  calcu- 
lated as  items  of  this  "  actual  cost."  Such  was,  in- 
deed, the  testimony  of  the  witnesses  before  this 
committee,  but  that  testimony  was  utterly  ignored  by 
the  committee  in  their  report.     It  would  tell  against 


70  THE    CREDIT    MOBILIER 

their  argument,  and  the  bias  which  it  is  manifest  they 
entertained  from  the  beginning  of  the  investigation. 
Again,  the  committee  refused  to  take  notice  of  the 
testimony  of  losses,  amounting  to  millions  of  dollars, 
which  the  Credit  Mobilier  sustained,  notably  the  loss 
of  their  entire  capital  of  $3,750,000,  which  had  been 
paid  in  in  cash,  and  was  entirely  used  up  in  the  con- 
struction of  the  road,  and  which  should  properly  be 
deducted  from  the  profits  shown.  The  committee 
also  have  recorded  as  profits  the  transfer  of  money 
from  one  account  to  another  ;  as  an  instance,  the  pay- 
ment by  the  trustees  of  $1,104,000  to  the  Credit 
Mobilier.  The  committee  cite  it  as  a  payment  by 
the  Union  Pacific  Railroad  Company.  Again,  the 
committee  have  figured  as  -profits  actual  losses,  as 
may  be  seen  in  the  bonus  which  the  Credit  Mobilier 
was  compelled  to  give  in  order  to  get  the  additional 
capital  subscribed  for.  As  an  inducement  to  the  sale 
of  these  additional  shares,  the  Credit  Mobilier  gave 
$1,000  in  first  mortgage  bonds  for  each  $1,000  sub- 
scription to  the  stock.  In  this  way  $1,125,000  of 
these  bonds  were  disposed  of,  it  being  a  loss  to  the 
company  of  that  amount,  but  which  the  committee 
have  set  forth  as  a  profit.  Nor  have  the  committee 
noticed  the  great  losses  which  the  Credit  Mobilier 
and  the  trustees  sustained  in  their  endeavors  to  find 
a  market  for  the  securities  they  had  taken.  It  was 
clearly  in  evidence  that  more  than  $5,000,000  of 
Union  Pacific  stock  was  sold  by  the  Credit  Mobilier 
at  $4.50  per  share,  because  it  could  be  disposed  of 
in  no  other  way. 


OF   AMERICA.  7 1 

But  now  the  actual  profit  earned  by  the  Credit 
Mobilier  and  the  trustees  was  in  evidence  before  the 
committee,  but  in  their  report  they  made  no  allusion 
to  it ;  let  us  do  that,  and  then  we  may  understand. 
There  was  never  any  question  raised  but  that  all  the 
profits  made  under  these  contracts  were  divided.  In 
fact,  the  committee  states  that  such  was  the  case. 
Below  will  be  found  the  date  of  each  dividend,  the 
amount  and  the  cash  value  of  each,  reckoning  the 
bonds  at  85  and  the  stock  at  30  : — 

Dec.  12,  1867,  $2,543,208  First  mortgage  bonds,       $2,161,726  80 

Dec.  12, 1867,  2,543,208  Union  Pacific  Stock,  -     -       726,962  40 

Jan.  3,  1868,  748,000  First  mortgage  bonds,     -        635,800  00 

June  17,  1868,  2,201,204  Cash,  -------     2,201,204  00 

July  8,  1868,  1,112.768  Cash, 1,112,768  00 

July  3,  1868,  2,804,050  First  mortgage  bonds,     -    2,383,442  50 

Dec.  29,  1868,  7,500,000  Union  Pacific  Stock,  -     -    2,250,000  00 

Dec,  1867,  420,000  12  per  cent.  div.  Cr.  Mob.,    420,000  00 

I9'872>438  11,891,903  70 

Deducting  the  loss  of  the  Credit  Mobilier  capital, 
(which  was  an  entire  loss),   --------     3,750,000  00 

Leaves  as  the  net  profits,  cash  value, 8,141,903   70 

To  this  there  should,  perhaps,  be  added  the  pres- 
ent value  of  the  Credit  Mobilier  stock.  But  that 
value  is  uncertain,  and  if  the  utmost  that  is  claimed 
by  some  should  be  realized,  there  might  be  added 
about  $2,000,000  to  this  as  the  total  profits.  But 
these  claims  are  very  uncertain. 

This  being  all  the  profit  realized  from  an  expen- 
diture of  about  $70,000,000  or  about  1 2  per  cent.  But 
not  counting  at  all  this  loss  of  capital,  the  profit  would 


72  THE    CREDIT    MOBILIER 

be  but  little  over  i6  per  cent,  upon  the  cost.  This 
conclusion  coincides  with  all  the  testimony  before  the 
committee,  and  to  an  unprejudiced  mind  shows  the 
bias  of  this  committee,  and  the  determination  to  un- 
earth some  gigantic  fraud,  whether  it  existed  there 
or  not.  From  this  report  were  derived  nearly  all  the 
arguments  that  were  made  before  Congress  upon 
this  subject,  and  which  arguments  have  tended  to  so 
large  an  extent  to  influence  the  public  mind,  and 
prejudice  the  public  against  the  operations  of  the 
Credit  Mobilier.  But  how  changed  is  the  result  I 
The  immense  profits  of  $43,000,000  which  have 
been  paraded  before  the  country,  have  dwindled 
down  to  less  than  ten  millions,  upon  an  expenditure 
of  some  $70,000,000.  Certainly  this  is  a  profit  that 
may  of  itself  sound  large,  but  it  was  the  result  of 
some  four  years  work,  and  of  great  expenditure. 
The  profit  was  not  larger  than  that  which  some  of 
our  merchant  princes  were  making  at  the  same  time 
and  against  whom  no  thought  of  wrong  was  ever 
entertained,  but  whose  industry  and  skill  were 
highly  commended. 


VI. 

THE  DIFFICULTIES  OF  CONSTRUC- 
TION. 

T  X  7'E  must  at  all  times  consider  the  risk,  and  the 
^^  circumstances  under  which  that  risk  was 
taken.  It  should  be  remembered  that  there  was  no  one 
else  willing  to  undertake  so  great  a  contract,  no  one 
who  would  be  willing  to  risk  all  he  had  in  such  an 
endeavor.  He  must  feel  sure  that  he  could  recover 
himself  from  his  great  outlay,  and  this  no  one  could 
do.  The  company  had  tried  to  build  the  road  itself 
and  had  wholly  failed,  so  that  it  became  necessary 
to  even  sell  their  rolling  stock  to  pay  their  debts. 
Whatever  was  done  must  be  done  under  the  greatest 
disadvantage.  All  materials  used  in  construction 
had  to  be  transported  overland  or  by  means  of  the 
Missouri  River,  which  was  exceedingly  expensive. 
The  people  were  afraid  it  would  not  succeed,  and  at 
times  could  not  be  induced  to  buy  its  bonds,  and  thus 
indeed  the  capital  necessary  for  its  completion  could 
not  be  obtained.  Under  all  these  discouraging  cir- 
cumstances this  construction  company  took  hold  of 
the  work  and  pushed  it  forward  to  completion.    Why 

73 


74  THE    CREDIT    MOBILIER 

was  a  construction  company  necessary?  It  was 
necessary  in  order  to  limit  the  liability  in  case  of 
loss.  Individuals  engaging  in  it  might  find  them- 
selves involved  as  partners  to  the  full  extent  of  all 
debts  contracted,  v^hile  the  liability  of  the  construc- 
tion company  was  limited  to  the  amount  of  its  capi- 
tal. But  this  was  only  one  reason.  There  were 
others  more  powerful.  By  the  charter  under  which 
the  road  was  built,  it  was  provided  that  the  capital 
stock  was  to  be  $100,000,000,  and  that  the  books  for 
subscriptions  to  stock  were  to  remain  open  until  the 
whole  amount  should  be  subscribed.  To  have  ena- 
bled any  company  or  set  of  men  to  obtain  control 
of  the  road  would  have  rendered  necessary  a  sub- 
scription of  some  $51,000,000.  Such  a  subscription 
was  an  utter  impossibility.  Every  effort  that  could 
be  made  was  made  at  the  beginning,  and  in  two 
years  the  total  subscriptions  amounted  to  only  a 
trifle  over  $2,000,000.  No  man  or  company  could 
be  induced  to  engage  in  such  a  gigantic  scheme 
unless  they  could  be  assured  that,  when  the  work 
was  in  progress,  and  success  assured,  they  were  to 
remain  secure  in  their  hope  of  profit.  Supposing 
that  a  subscription  of  $36,000,000  (the  amount  of 
stock  finally  issued,)  had  been  made,  and  the  work 
gone  on.  Here  there  would  have  been  no  chance 
for  any  profit  to  be  made  from  construction,  for  the 
work  would  then  be  done  by  the  road  itself,  and  the 
only  chance  for  any  profit  from  this  investment 
would  be  in  the  running  of  the  road  after  its  com- 
pletion.    When  the  work  was  so  far  along  that  its 


OF    AMERICA.  75 

successful  completion  was  assured,  another  party  of 
capitalists  might  come  forward,  and  by  new  sub- 
scriptions, for  the  books  must  still  remain  open,  could 
obtain  control  of  the  road,  while  those  who  had  built 
the  road,  who  had  borne  all  the  risk  of  the  enterprise, 
who  had  staked  their  money  on  the  work,  who  had 
risked  their  fortunes  on  its  construction,  would  be 
deprived  of  all  voice  in  the  management  or  control 
of  the  road,  by  those  who  had  borne  no  risk  at  all. 
It  was  this  fact  that  rendered  it  impossible  to  obtain 
subscriptions,  and  build  the  road  as  the  charter  sug- 
gested. By  means  of  the  construction  company,  all 
these  dangers  were  avoided.  Under  no  other  con- 
ditions could  the  road  have  been  built  at  all,  and 
under  this  plan  every  right  of  the  government  was 
amply  protected,  and  the  interests  of  every  stock- 
holder fully  secured. 

The  greatest  point  that  is  made  against  this  pro- 
ceeding is  that  the  construction  company,  as  organ- 
ized, consisted  of  the  same  men  who  directed  the 
other  company  with  whom  they  contracted.  While 
this  may  have  been,  under  most  circumstances  in 
which  the  government  was  interested,  against  policy 
and  good  faith,  there  was  certainly  no  law  forbid- 
ding it — there  was  no  question  as  to  its  technical 
legality  ;  and  it  is  a  serious  question  whether  a  better 
contract  could  have  been  made  by  or  with  any  other 
company,  though  wholly  separate  and  distinct  in 
interest  from  the  other.  None  save  those  who 
were  intimately  interested  in  the  success  of  the  road, 
could  be  induced  to  touch  such  a  contract.     It  was 


76  THE    CREDIT    MOBILIER 

not  as  though  other  roads  had  reached  across  the 
continent,  demonstrating  beyond  a  doubt  that  such 
an  enterprise  was  possible  of  success ;  it  was  not  as 
though  the  certainty  of  its  accomplishment  had  in- 
spired the  confidence  of  the  public  in  it,  and  had  made 
it  plain  that  it  would  be  safe  for  capital  to  invest. 
Like  all  first  experiments,  it  had  all  these  obstacles 
to  overcome  and  subdue.  It  was  like  the  pioneer 
who  goes  far  into  the  wilderness  to  prepare  a  foot- 
hold for  the  more  timid  to  follow.  The  success  of 
the  first  endeavor  has  made  it  easy  to  inspire  public 
confidence  in  other  similar  endeavors,  and  now  in 
the  popularity  of  such  undertakings  we  are  apt  to 
lose  sight  of  the  circumstances  surrounding  the  first. 
The  first  was  completed,  and  has  been  in  successful 
operation  for  more  than  eleven  years,  but  to  this 
day,  though  various  lines  have  been  started,  and 
have  received  the  same  fostering  care  and  assistance 
of  the  government,  not  one  in  this  length  of  time 
has  opened  a  line  to  the  Pacific,  and  will  not  for 
some  years  to  come.  They  certainly  do  not  have 
so  great  difficulties  to  surmount.  Public  confidence 
has  been  established,  and  it  has  been  demonstrated 
that  such  roads  can  be  built,  and  that  when  built, 
are,  or  can  be  made,  paying  investments.  However 
great  may  be  the  cry  against  the  immense  profits 
that  the  Credit  Mobilier  made  in  the  construction  of 
the  Union  Pacific  Railroad,  all  this  cry  has  arisen 
out  of  the  fact  that  certain  members  of  Congress 
became  interested  in  the  stock  of  the  Credit  MobilieY, 
and   political  capital    was    made    out   of  it   for  the 


OF    AMERICA.  77 

purpose  of  controlling  elections.  Other  roads  have 
been  built  in  the  same  way,  and  are  still  being  built 
in  the  same  manner.  How  many  people  are  there 
now  to  whom  the  name  of  Credit  Mobilier  is  per- 
fectly familiar,  who  have  ever  heard  of  the  Contract 
and  Finance  Company  ?  and  who,  if  asked  to-day, 
could  tell  when  or  where  such  an  organization  ever 
existed  ?  And  yet  it  is  a  corporation  almost  identi- 
cal with  the  Credit  Mobilier,  so  far  as  its  purposes 
and  organization  are  concerned,  and  in  the  work 
which  it  did.  The  Contract  and  Finance  Company 
was  organized  under  the  laws  of  the  State  of  Cali- 
fornia, and  was  used  for  the  purpose  of  constructing 
the  Central  Pacific  Railroad  from  San  Francisco  to 
its  junction  with  the  Union  Pacific  Railroad.  It 
was  in  operation  at  the  same  time  that  the  Credit- 
Mobilier  was  at  work  on  the  eastern  side  of  the 
Rocky  Mountains,  and  was  composed  of  the  prin- 
cipal stockholders  of  the  Central  Pacific  Railroad. 
This  company  had  a  contract  to  build  some  six 
hundred  miles  of  the  road,  and  the  profits  that  arose 
from  that  construction  were  very  large — far  larger 
than  those  of  the  Credit  Mobilier — and  this  profit, 
instead  of  being  divided  among  the  stockholders  of 
the  Central  Pacific  Railroad,  as  were  the  profits  of 
the  Credit  Mobilier  among  the  stockholders  of  the 
Union  Pacific  Railroad,  went  into  the  pockets  of  a 
very  few  individuals.  In  effect  these  few  individuals 
took  the  contract  of  building  the  road,  of  themselves 
as  representatives  for  that  road,  at  an  immense 
profit.     The  government  was  interested  in  the  road 


78  THE    CREDIT    MOBILIER 

the  same,  and  to  the  same  extent,  as  in  the  Union 
Pacific  Railroad.  But  how  changed  the  circumstan- 
ces when  a  few  members  of  Congress  happened  to 
own  a  few  shares  in  the  one.  The  one  has  been 
condemned  unmercifully';  its  officers,  and  those  inter- 
ested in  it,  have  been  branded  as  felons  ;  its  name 
has  become  a  by- word  for  infamy,  while  the  other, 
pursuing  the  same  plan,  only  not  half  so  liberal  to 
the  general  public,  has  gone  free,  and  its  name, 
even,  is  almost  unheard  of  outside  of  special  circles. 
Was  the  government  defrauded  by  the  one?  then 
also  was  it  by  the  other.  Was  its  prirjciple  wrong  ? 
then  so  was  that  of  the  other.  Is  the  one  to  be 
condemned  ?  then  so  must  the  other.  Must  a  policy 
of  hate  be  inaugurated  against  the  one  ?  then  so 
must  it  against  the  other.  Must  the  one  be  held 
up  for  public  condemnation  ?  then  so  must  the 
other.  They  meet  alike  on  common  ground.  They 
were  each  actuated  by  the  same  motives.  The 
public  has  received  the  same  great  and  wonderful 
advantages  from  each.  A  great  national  highway 
has  been  constructed.  The  union  of  our  common 
country  has  been  cemented  by  ties  that  can  never 
be  broken  ;  and  even  though  the  loans  made  by  the 
government  should  never  be  paid,  already  has  the 
government  saved  enough  to  more  than  repay  all 
the  outlay. 

Whether  all  this  has  been  the  result  of  the  labors 
of  the  Credit  Mobilier  it  is  hard  to  say,  and  cer- 
tainly as  hard  to  deny.  The  interests  of  the  Urflon 
Pacific    Railroad  and    the    Credit    Mobilier  are  so 


OF    AMERICA.  '  79 

interwoven  with  each  other  that  it  is  impossible  to  sep- 
arate them.  Certain  it  is  that,  without  the  interven- 
tion of  a  construction  company,  the  Union  Pacific 
Railroad  would  never  have  been  built.  But  whether 
it  was  absolutely  necessary  that  that  construction  com- 
pany should  be  identical  with  the  Railroad  Company, 
is  the  only  question  that  can  be  raised  against  the  plan 
of  its  operations.  It  is  claimed  that  this  combination 
was  against  equity  and  good  conscience,  and  that  the 
directors  of  the  Union  Pacific  Railroad  Company  had 
no  right  to  make  a  contract  with  themselves,  though 
under  the  guise  of  another  corporation,  by  which  they 
would  make  for  themselves  a  profit  from  the  funds  of 
the  Railroad  Company  ;  but  that  they  must,  even  in 
that  capacity,  be  regarded  as  trustees  for  the  Railroad, 
and  whatever  profit  was  made  through  their  contract 
must  inure  to  the  benefit  of  the  Railroad.  While  this 
may  all  be  true,  the  question  would  naturally  arise,  for 
whom,  in  that  capacity,  would  they  become  trustees? 
The  answer  must  be,  for  the  holders  of  the  stock  of 
the  Union  Pacific  Railroad.  What  was  the  nature  of 
the  agreement  by  which  they  held  their  trust?  It  was 
that  all  the  profits  arising  from  the  contract  should 
be  paid  to  the  holders  of  the  stock  of  the  Credit 
Mobilier,  and  those  stockholders  were  identically 
the  same  as  the  holders  of  the  stock  of  the  Union 
Pacific  Railroad.  It  was  clearly  in  evidence  that 
such  was  the  case,  and  where  there  were  any  who 
would  not  sign  the  agreement  giving  to  the  trustees 
their  irrevocable  power  of  attorney  or  proxy  to  vote 
on  their  shares,  their  stock  was  bought  as  far  as  it  was 


8o  THE    CREDIT    MOBILIER 

possible,  so  that  no  stock  should  be  unrepresented 
in  the  division  of  profits.  It  should  also  be  remem- 
bered that  every  stockholder  agreed  in  writing 
to  the  Ames  and  Davis  contracts,  and  thus  cer- 
tainly no  advantage  was  taken  of  their  position. 
Was  the  government  a  party  who  should  have  been 
consulted?  What  was  the  interest  of  the  govern- 
ment? The  government  gave  the  right  of  way  on 
the  condition  that  the  road  should  be  built ;  it  gave 
on  the  same  condition  large  subsidies  of  land.  It 
also  loaned  the  road  a  certain  amount  of  its  bonds, 
consenting  that  its  claim  should  be  a  second  lien  on 
the  road,  subject  to  an  equal  indebtedness,  to  be 
created  by  the  Railroad  Company,  those  bonds  to  be 
paid  by  the  Railroad  at  the  expiration  of  thirty  years  ; 
and,  in  case  of  the  net  profits  of  the  road  exceeding 
ten  per  cent,  of  the  cost  of  the  road,  the  government 
to  have  the  right  to  regulate  the  rates  of  fare,  and 
reserved  to  itself  the  right  to  appoint  certain  direct- 
ors of  the  road,  and  the  right  to  legislate  upon  the 
charter  as  granted.  Have  any  of  the  conditions 
which  the  government  required  been  unfulfilled? 
The  road  was  completed  as  required,  a  first-class 
road,  and  was  completed  some  seven  years  before  it 
was  required.  Upon  the  completion  of  the  road  the 
grants  of  land  and  right  of  way  became  absolutely 
the  property  of  the  road,  and  the  government  had  no 
cause  to  complain.  In  fact,  the  government  became, 
by  the  early  completion  of  the  road,  a  great  gainer, 
and  saved,  by  that  event  alone,  millions  of  dollars 
every   year.     Was   the    cost   of    the   road   greatly 


OF    AMERICA.  8l 

increased  by  the  manner  in  which  it  was  built?  and  by 
that  means  were  the  future  claims  of  the  government 
rendered  of  no  account?  Was  it  the  duty  of  the 
company  to  build  the  road  by  using  as  little  of  the 
loan  of  the  government  as  possible,  or  had  the  road 
the  right  to  use  all  of  the  loan  which  the  government 
granted?  And  if  the  company,  in  building  the  road, 
let  the  contracts  to  themselves,  did  they  thereby  stand 
in  such  a  relation  to  the  government  that  they  must 
account  for  all  the  profits  they  received?  If  any 
question  should  arise  as  to  the  accounting  to  the 
shareholders  of  the  Union  Pacific  stock,  those  ques- 
tions are  fully  answered  in  the  fact  that  an  equal 
division  of  all  profits  was  made  with  the  holders  of 
that  stock  ;  they  not  only  all  agreed  to  the  contracts 
and  arrangements,  but  themselves  received  whatever 
profit  arose  from  the  execution  of  those  contracts. 
But  could  the  road  have  been  built  at  a  less  price 
than  it  was?  Suppose  that  the  $36,oc)0,cxx)  repre- 
sented by  the  stock,  had  been  paid  into  the  treasury 
in  cash,  it  is  even  probable  that,  under  such  circum- 
stances, the  road  could  not  have  been  built  at  all. 
Economy  and  frugality,  under  such  circumstances, 
could  not  have  been  expected.  The  country  at 
large,  seeing  that  the  work  was  sure  to  go  through, 
urged,  in  every  way  possible,  the  utmost  speed  of 
construction  ;  and  more,  Congress  had  given  to  the 
Central  Pacific  Railroad  Company  the  right  to  build 
its  road  until  it  should  meet  the  Union  Pacific,  and 
thus  set  the  two  great  companies  on  a  race  across 
the  continent.     At  this  time  there  was  no  road  across 


82  THE    CREDIT    MOBILIER 

the  State  of  Iowa,  and  all  the  materials  must  be 
transported  overland,  or  by  way  of  the  Missouri 
River,  from  Saint  Louis  to  Omaha,  at  immense 
cost.  At  the  commencement  of  the  building  of  the 
road  no  satisfactory  route  had  been  selected  across 
the  mountains.  It  was  building  a  railroad  across  a 
country  without  timber,  without  fuel,  without  water, 
(all  of  which  must  be  transported),  with  gold  at  i6o 
and  iron  $i6o  per  ton,  with  gangs  of  men  at  work 
both  day  and  night,  with  half  the  force  engaged  in 
keeping  the  Indians  from  killing  the  other  half ;  and 
all  these  working  together  would  have  created  a 
spirit  of  extravagance  that  would  have  wasted  the 
entire  capital  of  the  company,  and  left  the  road  un- 
finished. As  these  men  undertook  the  enterprise,  it 
seemed  to  those  careful  capitalists  of  the  country  a 
wild  waste  of  money,  in  the  most  favorable  light. 
There  was  a  spirit  of  adventure  about  it,  of  loyalty 
and  courage,  such  as  were  never  before  seen  in  the 
history  of  railroad  enterprise.  The  conditions  were 
utterly  inconsistent  with  anything  like  prudence  or 
economy.  Had  all  that  money  been  in  the  treasury, 
the  road  would  necessarily  have  been  built  by  day's 
work,  for  no  responsible  contractor  could  have  been 
found  to  take  a  contract  when  he  had  to  freight  his 
materials  at  such  vast  expense,  and  where  he  had  to 
keep  a  standing  army  to  protect  his  workmen  from 
the  Indians ;  and  it  has  been  asserted  by  those  well 
qualified  to  judge,  that  the  contract  assumed  by 
Mr.  Ames  was  the  wildest  contract  ever  made  by  a 
civilized  man. 


OF   AMERICA.  8;^ 

In  taking  this  contract  as  they  did,  these  men  were 
forced  to  exercise  as  great  economy  as  possible  in 
order  to  realize  any  profit  at  all,  and  the  costs,  outside 
of  what  appears  as  the  actual  cost  of  construction,  were 
enormous  ;  and  beyond  all,  it  is  a  fact  that  even  with 
as  much  economy  as  could  have  been  used,  all  the 
money  invested  in  the  enterprise  would  have  been 
wasted  except  for  the  accidental  discovery  of  coal  ■ 
along  the  route.  At  the  time  the  road  commenced 
operations  they  were  paying  from  nineteen  dollars 
to  twenty  dollars  per  cord  for  wood  that  was  not  the 
equivalent  of  more  than  one  third  or  one  fourth  of  a 
ton  of  coal.  The  cost  of  the  road,  then,  as  it  was 
built  by  the  Credit  Mobilier,  is  less  than  would  have 
been  the  cost  could  it  have  been  possible  to  have 
built  the  road  otherwise.  The  intervention  of  the 
construction  company  was  necessary.  The  interest 
which  the  stockholders  had  in  the  success  of  the 
railroad  is  all  that  made  it  possible  for  the  road  to 
be  built.  The  government  has  not  been  wronged. 
Every  obligation  which  the  road  was  to  perform  has 
been  performed.  The  government  paid  no  money  ; 
it  merely  lent  its  credit,  and  its  relation  to  the  road 
is  that  of  a  creditor  to  a  debtor  with  a  lien.  The 
government  can  not  be  in  the  slightest  injured  if  the 
debt  is  paid.  But  it  is  said  the  debt  has  not  been 
paid ;  but  it  is  not  due,  and  the  government,  the 
same  as  an  individual,  has  no  right  to  collect  a  debt 
before  it  is  due.  The  security  which  the  government 
took  is  that  of  its  own  choosing.  It  ought  not  to 
complain   of    that,    and    the  onl}-    right   which    the 


84  THE    CREDIT    MOBILIEK 

government  might  assume  is  to  prevent  the  waste  ot 
its  mortgage  security,  so  that  the  debt  may  be  paid 
A^hen  due.  This  right  the  government  has  assumed, 
ind  a  sinking  fund  has  been  established,  by  means 
>f  which  every  dollar  of  the  bonds  advanced  by  the 
government  will  be  paid  at  its  maturity.  Into  this 
sinking  fund  the  Railroad  Company  is  yearly  turning 
a  large  amount  of  money.  But  yet  the  Railroad 
Company  has  really  faid  no  money  into  this  sinking 
fund.  The  amount  due  the  company  from  the  gov- 
ernment on  half  transportation  account  has  been 
sufficient  to  meet  any  such  requirement,  without  the 
payment  by  the  company  of  a  dollar  from  its  other 
earnings.  How  can  the  government  be  wronged 
by  any  such  showing  as  that? 

The  government  has  everything  that  it  required 
of  the  road,  and  has  assurance  that  every  dollar  will 
be  repaid.  The  government  has  never  parted  with 
a  dollar,  except  interest  that  it  has  paid  on  the 
bonds,  and  its  security  is  ample.  It  has,  by  this 
operation,  secured  advantages  of  unlimited  value. 
The  road  has  been  the  means  of  saving  it  millions  of 
dollars  every  year,  and  has  increased  the  value  of  its 
own  land  through  which  the  road  passes,  to  twice  the 
former  value,  and  has  rendered  it  possible  for  that 
land  to  find  a  market,  where  before  none  existed  at 
any  price  ;  and  then,  above  all,  the  inestimable  value 
the  road  has  been  to  the  whole  country  can  never 
be  understood.  The  internal  commerce  that  has 
been  created  by  it  is  far  larger  than  the  most  enthu- 
siastic advocate  of  the  road  had  ever   dreamed  of. 


OF    AMERICA.  85 

In  every  respect  the  government  has  been  the 
gainer,  and  in  no  respect  has  it  been  injured,  or  can 
it  be  injured. 

If,  then,  there  has  been  any  wrong  done  in 
dividing  the  dividends  among  the  stockholders  of 
the  Credit  Mobilier,  and  that  money  is  to  be  recov- 
ered, to  whom  would  it  belong?  The  answer  must 
be,  to  the  stockholders  of  the  Union  Pacific  Rail- 
road Company.  But  they  are  the  very  ones  to 
whom  it  was  divided,  the  stockholders  of  the  Credit 
Mobilier  and  the  Union  Pacific  Railroad  being  ident- 
ical. We  need  not  dwell  upon  this  longer,  for  it  is 
impossible  to  see  how  any  wrong  has  been  done 
any  one.     In  fact  none  has  been  done. 

In  concluding  this  portion  of  our  subject  we  desire 
to  allude  to  one  fact  in  relation  to  the  difl^erent  part- 
ies connected  with  the  Credit  Mobilier  in  the  con- 
struction of  this  road,  and  the  views  which  were 
held  by  them. 

There  were  two  parties  in  what  has  been  famili- 
arly known  as  the  Union  Pacfic  Railroad  ring, 
Durant  and  his  friends  constituting  one  and  Oakes 
Ames  and  his  associates  the  other.  Their  objects 
were  as  opposite  as  it  was  possible  to  be,  and  upon  the 
prevailing  of  one  or  the  other  depended  the  success 
or  utter  failure  of  the  road.  The  Durant  party 
worked  with  the  idea  of  building  the  road  in  the 
cheapest  manner  possible,  for  the  purpose  of  making 
the  largest  profit  conceivable  from  the  contracts  for 
construction,  avowing  that  the  road,  when  built, 
could  never  be  a  paying  investment,  and  that  those 


86  THE    CREDIT    MOBILIER 

who  looked  for  any  profit  in  this  line  were  deluded. 
They  cared  not  how  the  road  was  constructed,  so 
that  it  would  be  accepted  by  the  government,  and 
the  government  aid  secured.  They  cared  not  to 
retain  the  stock  of  the  company,  and  while  this 
party  was  in  the  ascendency  in  the  control  of  the 
Credit  Mobilier,  a  large  proportion  of  the  stock 
taken  in  payment  for  construction  was  sold  for  four 
and  one-half  cents  on  the  dollar.  It  was  not  con- 
sidered by  them  of  any  value,  for  they  were  con- 
vinced that  the  road  would  never  yield  any  returns 
to  the  stockholders.  Not  only  was  this  done,  but 
in  their  attempt  to  get  the  road  accepted  as  they 
completed  it,  they  paid  to  one  government  director 
$25,000  to  induce  him  to  report  in  favor  of  its 
acceptance. 

The  object  of  the  Ames  party  was  to  build  as 
good  a  road  as  possible,  and  have  it  fully  completed 
and  equipped.  They  did  not  have  any  expectation 
of  receiving  large  profits  from  their  contracts.  It  was 
their  object  to  have  a  good  road,  and  in  its  manage- 
ment, after  completion,  realize  their  profits.  They 
believed  that  the  business  of  the  road  would,  in  time, 
be  large,  and  would  yield  large  returns  above  run- 
ning expenses.  They  had  great  hopes  of  the 
country  through  which  the  road  was  built,  and 
believed  that  in  a  few  years  the  local  traflic  would 
be  immense.  With  this  view  in  mind  they  retained 
as  much  of  the  stock  of  the  road  —  which  they  took 
in  payment  for  their  work  —  as  they  could.  Upon 
this  they  staked  all  their  expectation  of  profit.     The 


OF    AMERICA.  87 

controlling  minds  in  this  policy  were  Oakes  and 
Oliver  Ames,  and  to  their  influence  is  due  the  suc- 
cessful building  of  the  road. 

A  decade  has  shown  the  wisdom  of  their  faith. 
The  Union  Pacific  Railroad  is  now  paying  all  its 
running  expenses,  all  its  interest,  is  making  ample 
provision,  in  sinking  funds,  for  the  extinguishment 
of  the  government  loan  at  its  maturity,  and  is  paying 
about  eight  per  cent,  dividends  upon  its  stock,  which 
has  ready  sale  in  open  market  at  nearly  par. 

This  result  has  been  achieved  by  the  faith  and 
honesty  of  the  Ameses,  whose  influence  was  strong 
enough  to  control  the  management  of  the  construc- 
tion company  through  whose  instrumentality  the 
road  was  built. 


VII. 

THE  DISAGREEMENT   WITH   MR, 
McCOMB, 

TN  the  former  part  of  this  work  we  have  at- 
-*-  tempted  to  show  the  connection  of  the  Credit 
Mobilier  of  America  with  the  building  of  the 
Union  Pacific  Railroad,  and  in  so  doing  we  have 
found  it  necessary  to  go  into  some  detail  regarding 
the  history  of  that  road,  the  cost  of  its  construction, 
&c.,  as  all  these  matters  necessarily,  came  into  a 
consideration  of  the  workings  and  purposes  of  the 
Credit  Mobilier.  The  two  organizations  were  com- 
posed of  the  same  persons  and  their  interests  became, 
in  a  great  measure,  identical,  and  it  was  impossible 
to  separate  them  and  to  study  them,  except  in  con- 
nection one  with  the  other.  To  the  Credit  Mobilier 
ma}^  justly  belong  the  credit  of  building  the  Union 
Pacific  Railroad,  though  it  is  true  that  to  a  great 
extent  that  organization  did  not  in  fact  have  the 
control,  but  upon  its  stockholders  rested  the  respon- 
sibility, and  to  them  came  what  profit  there  was  in 
its  construction.  The  great  work  that  was  accom- 
plished will  ever  stand  as  the  noblest  monument  of 
the  achievements  of  mankind,  and  the  blessings  that 


THE    CREDIT    MOBILIER.  89 

have  come  upon  the  country  through  which  it  was 
built,  by- reason  of  its  construction,  can  never  be 
told,  while  coming  generations  will  ever  praise  those 
through  whose  instrumentality  it  was  built. 

It  is  not  natural  that  works  of  this  character  should 
ever  assume  the  prominence  that  has  been  accorded 
the  Credit  Mobilier,  unless  some  circumstance  for- 
eign to  its  main  object  should  be  associated  with  it. 
Such  indeed  was  the  case  of  the  Credit  Mobilier,  and 
it  is  that  circumstance  which  it  shall  be  our  pur- 
pose at  this  time  to  set  forth.  But  for  the  accidental 
connection  with  it  of  certain  members  of  Congress, 
its  fame  would  never  have  extended  beyond  the 
knowledge  of  its  own  stockholders.  It  mattered  not 
whether  any  crime  was  ever  connected  with  it ;  it 
mattered  not  how  pure  ma}^  have  been  the  motives 
of  those  who  bought  or  sold  that  stock  ;  it  mattered 
not  how  large  or  small  may  have  been  the  profits 
realized  by  the  holders  of  that  stock  ;  it  mattered  not 
whether  the  government  was  the  loser  or  gainer  in 
its  working ;  it  was  sufficient  to  know  that  political 
capital  could  be  made  out  of  it,  and  that  some  who 
held  high  places  of  trust  and  honor  could  be  brought 
low,  and  their  names  forever  clouded  with  infamy. 
Quietly  the  work  had  been  done,  an  approving  peo- 
ple had  praised,  and  justly  praised,  the  remarkable 
energy  which  had  characterized  those  under  whose 
management  the  work  was  done,  and  when  that  work 
was  completed,  millions  joined  in  the  glad  shouts  of 
rejoicing.  Yet  ere  the  last  rail  was  laid,  ere  the 
last  spike  was  driven,  that  riveted  forever  the  band 


pO  THE    CREDIT    MOBILIER 

of  union  between  the  East  and  the  West,  that  ren- 
dered the  union  of  our  states  forever  secure,  there 
could  be  heard  the  low  mutterings  and  tremblings  of 
the  volcano  that  four  years  later  was  to  break  forth, 
casting  ruin  and  infamy  upon  many  a  fair  name. 
Dissentions  had  arisen  in  the  management  of  the 
corporations.  Those  who  had  been  connected  with 
the  Credit  Mobilier  from  an  early  period,  becoming 
discouraged  at  receiving  no  returns  for  their  invest- 
ments, sullenly  held  back,  until  it  seemed  as  though 
the  whole  scheme  must  prove  a  disastrous  failure ; 
but  when  a  new  life  was  given  the  enterprise  through 
the  connection  and  personal  influence  of  a  new  class 
of  men ;  when  it  seemed  as  though  success  might 
crown  their  efforts  ;  when  in  fact  large  returns  were 
insured  them,  none  more  eager  than  these  to  step 
forward  and  assert  their  claims  to  the  profits  which 
they  attempted  before  to  destroy,  and  w^hich  in  justice 
belonged  to  others. 

As  we  have  seen  before,  the  Credit  Mobilier  passed 
into  the  hands  of  the  principal  stockholders  of  the 
Union  Pacific  Railroad  in  the  early  part  of  the  year 
1864,  and  that  it  took  the  active  management  of 
the  Hoxie  contract,  so  called,  in  March,  1865. 
Throughout  that  summer  the  Company  worked  upon 
that  contract,  but  it  soon  became  apparent  to  all  that 
even  then  the  work  must  prove  a  failure,  and  that 
the  Credit  Mobilier  could  not  carry  it  on  to  success, 
unless  new  life,  new  energy,  and  a  great  increase  of 
capital  could  be  secured.  This  certain  failure  which 
stared  them  in  the  face,  and  which  none  could  avoid 


OF    AMERICA.  9I 

comprehending,  was  the  result  of  the  peculations  and 
]obs  that  were  being  carried  on  by  those  in  charge 
of  the  companies.  The  object  of  every  one,  from  Mr.  ^" 
Durant  down  to  the  common  workman,  was  to  grow 
rich  at  the  expense  of  the  company  ;  and  every  one 
was  interested  in  some  manner  of  job  by  which  the 
company  was  grossly  robbed.  Durant  was  a  man  of 
great  extravagance,  and  he  cared  not  for  the  ex- 
penses incurred,  so  long  as  he  could  reap  the  benefit 
from  every  payment.  His  main  idea  was  to  make — 
his  profit  from  the  construction  ;  and,  to  further  his 
own  personal  advantage,  he  discouraged  none  of 
those  schemes  by  which  the  company  was  defrauded, 
so  long  as  he  could  share  the  returns.  Under  such 
management,  it  was  no  wonder  that  failure  was  cer- 
tain. Not  only  were  new  life,  energy,  and  capital 
necessary,  but  honesty  and  integrity  as  well. 

It  was  thus,  while  the  fate  of  the  Union  Pacific 
Railroad  was  trembling  in  the  balance,  that,  in  Sep- 
tember, 1865,  after  the  most  earnest  solicitation  and 
appeals  to  his  patriotism,  Mr.  Oakes  Ames,  of  Massa- 
chusetts, a  member  of  Congress,  was  persuaded  to 
embark  in  the  enterprise.  Mr.  Ames  was  a  man  of 
very  large  means,  of  undoubted  integrity,  and  pos- 
sessed of  the  most  wonderful  energy.  His  entry  into 
this  work  was  with  his  whole  heart  and  strength.  His 
first  investment,  for  himselfand  family,  was  more  than 
a  million  dollars.  From  this  time  forward  he  became  ^ 
identified  with  the  building  of  the  road  ;  no  labor  too 
arduous,  no  sacrifice  too  great,  no  risk  too  hazard- 
ous ;  he  felt  confident  of  ultimate  success,   and  he 


92  THE    CREDIT    MOBILIER 

lost  no  opportunity  to  urge  his  personal  friends  to 
join  him  in  the  enterprise.  He  desired  to  have  asso- 
ciated with  him  men  of  means  and  influence,  men 
whose  names  would  inspire  confidence  and  give  to 
the  enterprise  a  stability  of  character  and  standing 
that  would  induce  others  to  join  with  them.  He 
went  to  his  personal  friends  and,  meeting  all  their 
objections,  induced  them  to  put  their  money  in  the 
road.  He  went  to  his  friends  in  Congress  and 
demonstrated  to  them  the  great  necessity  for  the 
road,  and  some  did  join  with  him,  and  others  prom- 
ised. At  this  time  Congress  had  no  measure  before 
it  affecting  the  Pacific  roads  ;  the  last  legislation  had 
been  fourteen  months  prior  to  the  first  connection  of 
Mr.  Ames  with  the  CreditMobilier  or  the  Pacific  road. 
Every  act  of  legislation  they  desired  had  already  been 
granted;  they  had  nothing  to  ask  of  Congress,  and 
every  department  of  government  was  so  fully  in 
accord  and  sympathy  with  the  undertaking  that  there 
was  not  the  slightest  cause  to  fear  any  unfriendly 
legisla;tion.  The  government  was  clamorous  to 
have  the  work  completed,  and  was  ready  to  grant 
any  further  concessions  that  might  be  requisite  to 
the  building  of '  the  road.  The  popular  feelmg 
throughout  the  whole  country  was  so  strongly  in 
favor  of  the  early  completion  of  the  road  that  no 
man  would  have  risked  his  reputation  and  standing 
among  his  constituents  by  having  attempted  to 
retard  the  progress  of  the  road.  Under  these  cir- 
cumstances, Mr.  Ames  felt  no  compunction  in  ask- 
ing members  of  Congress  to  join  with  him. 


OF    AMERICA.  93 

Through  the  years  1865,  1866,  and  the  first  part 
of  1867,  the  Credit  Mobilier  continued  to  work  upon 
the  building  of  the  road.  The  original  contract  of 
Hoxie  had  been  extended  to  the  one  hundredth 
meridian,  a  distance  of  two  hundred  and  forty-seven 
miles,  and  the  company  still  continued  to  work  on 
the  road  beyond  that  point.  The  Credit  Mobilier 
had  as  yet  paid  no  dividends.  On  the  contrary, 
their  entire  capital,  amounting  now  to  $3,750,000, 
had  been  swallowed  up  in  the  construction  of  the 
road.  They  had  been  compelled  to  take  the  securi- 
ties of  the  Union  Pacific  Railroad  Company  in  pay- 
ment of  work,  and  no  market  could  be  found  for 
them.  Efforts  had  been  made  to  get  contractors  to 
build  the  road,  without  avail.  Mr.  Durant  had 
quarrelled  with  members  of  the  Credit  Mobilier,  and 
had  been  ousted  from  the  direction  of  the  Company, 
and  he  determined  that  the  Credit  Mobilier  should 
never  have  another  contract  for  building  the  road ; 
and,  with  his  influence,  as  an  ofliicer  and  stockholder 
in  the  Union  Pacific  Railroad  Company,  and  the 
power  of  the  courts,  this  he  prevented.  In  August, 
1867,  a  compromise,  or  at  least  the  nature  of  one, 
was  concluded,  by  which  Mr.  Oakes  Ames  took  his 
great  contract  for  building  667  miles  of  the  road  at  a 
cost  of  a  little  more  than  $47,000,000.  Two  months 
later,  as  we  have  seen,  this  contract  was  as- 
signed to  the  seven  trustees,  for  certain  purposes 
and  uses.  About  February,  1867,  the  capital  of  the 
Credit  Mobilier  was  increased  50  per  cent.,  or  from 
$2,500,000   to   $3,750,000;    and  it  was   decided  to 


94  THE    CREDIT    MOBILIER 

apportion  this  to  the  then  stockholders  fro  rata  with 
the  stock  the}'  then  held.  This  increase  of  capital 
was  deemed  so  absolutely  necessary  that,  as  an  in- 
ducement to  take  it,  the  company  gave  as  a  bonus 
$  1,000  in  Union  Pacific  bonds,  for  every  $1,000  of 
the  additional  stock  taken.  But  so  low  was  the  con- 
fidence, not  only  of  the  public,  but  the  stockholders 
themselves,  that  many  declined  taking  the  new 
stock,  even  declaring  that  they  Would  rather  lose 
their  present  investment  than  to  sink  another  dollar 
in  the  enterprise.  Thus  a  few  shares  of  the  stock 
remained  in  the  hands  of  the  company  undisposed 
of,  there  being  in  all  650  shares.  During  all  the 
time  intervening  prior  to  the  execution  of  the  Oakes 
Ames  contract,  Mr.  Ames  had  been  endeavoring  to 
secure  the  co-operation  of  every  man  of  influence 
with  whom  he  came  in  contact,  seeking  to  sell  them 
an  interest  in  the  Credit  Mobilier,  and  he  secured 
promises  from  many.  After  the  great  contract  had 
been  assigned  to  the  trustees  and  work  fairly  com- 
menced, and  it  was  seen  that  large  profits  would  be 
likely  to  accrue,  then  there  became  a  demand  for  the 
stock.  Mr.  Ames,  on  his  return  to  Congress  in  the 
fall  of  1867,  made  arrangements  to  transfer  the 
stock,  as  soon  as  he  could  obtain  it  from  the  com- 
pany, to  such  as  he  had  agreed  should  have  it,  and 
also  spoke  to  others  regarding  it.  In  the  winter  of 
1867-68,  a  meeting  of  the  principal  stockholders  of 
the  Credit  Mobilier  was  held  at  the  Fifth  Avenue 
Hotel  in  New  York,  at  which  time  Mr.  Ames  made 
the  request  that  the  650  shares  Qi  stock  then  belonging 


OF    AMERICA.  95 

to  the  Company  be  transferred  to  him,  that  he 
might  fulfil  the  obligations  he  had  made  with  his 
various  friends.  Mr.  T.  C.  Durant  stated  he  also 
had  made  numerous  engagements  with  his  friends, 
and  demanded  that  the  stock  be  transferred  to  him. 
Mr.  H.  S.  McComb  made  a  demand  to  have  250 
shares  transferred  to  him,  together  with  the  50  per 
cent,  increase,  making  375  shares  in  all.  His  claim 
was  that  he  had  agreed  to  take  250  shares  of  the  old 
stock  on  March  3,  1866,  and  that  he  now  demanded 
the  stock  with  all  the  rights  which  accrued  to  it. 
This  was  a  claim  that  none  of  the  other  stockhold- 
ers would  recognize,  and  a  great  deal  of  discussion 
arose  over  it.  It  was  finally  agreed  that  the 
stock  should  be  divided  between  Mr.  Durant  and 
Mr.  Ames,  the  former  to  have  370  shares,  and 
the  latter  280  shares.  This  arrangement  was 
agreed  to  by  Mr.  McComb,  but  the  president  was 
unwilling  to  transfer  the  stock  upon  the  verbal 
assent  of  Mr.  McComb,  and  so  the  following 
agreement  was  entered  into  by  these  principal  stock- 
holders :  — 

We,  the  undersigned,  stockholders  of  the  Credit 
Mobilier  of  America,  understanding  that  $65,000 
of  the  capital  stock  of  this  company,  held  in  trust 
by  the  president,  has  been  promised  certain 
parties  by  T.  C.  Durant  and  Oakes  Ames,  do 
hereby  consent  to  advise  the  transfer  of  said  stock 
to  such  parties  as  they,  the  said  Durant  and 
Ames,  have  agreed   upon  and  designate,   say  to 


96  THE    CREDIT    MOBILIER 

Durant     parties     $37,000,     and     Ames     parties 
$28,000. 

John  Duff,  John  B.  Alley, 

Thomas  C.  Durant,      C.  S.  Bushnell, 
J.  Bardwell,  Sidney  Dillon, 

Oakes  Ames,  H.  S.  McComb, 

Oliver  Ames. 

The  undersigned  stockholders  of  the  Credit  Mobilier 
of  America  recommend  the  issue  to  Hon.  Oakes 
Ames,  trustee,  of  ninety-three  (93)  shares  of  the 
capital  stock  of  this  company  at  par. 

T.  C.  Durant,  S.  Hooper  &  Co. 

C.  S.  Bushnell,  J.  Bardwell, 

Oakes  Ames,  John  Duff, 

Oliver  Ames,  Wm.   H.  Macy, 

C.  A.  Lombard. 

Mr.  McComb  says  he  never  read  this  paper  which 
he  signed,  but  the  facts  have  been  clearly  shown 
that  he  at  first  refused  to  sign  it,  and  stated  his  rea- 
.  sons,  claiming  that  the  paper  failed  to  recognize  any 
claim  which  he  had  made  ;  but  at  last  he  did  sign  it, 
fully  understanding  all  that  it  contained. 

This  division  of  those  shares  shows  the  manner  in 
which  Mr.  Ames  secured  the  shares  which  he  had 
sold  to  his  friends,  and  in  taking  them  from  the 
Company  paid  their  par  value  to  the  Company.  They 
were  then  no  longer  the  property  of  the  Company, 
but  the  property  of  Mr.  Ames,  and  the  Company 
had  no  further  control. 


OF    AMERICA.  97 

This  division  did  not  tend  to  lesson  the  hostility 
between  Mr.  McComb  and  the  Credit  Mobilier.  He 
still  insisted  that  the  375  shares  of  stock  belonged  to 
him,  and  maintained  his  demand  for  that,  together 
with  all  the  dividends  that  had  been  declared  upon 
it,  and  before  the  year  was  closed  he  commenced  a 
suit  against  the  Company  and  its  officers  for  the 
recovery  of  the  stock,  to  his  individual  use.  In  sup- 
port of  this  claim  affidavits  were  filed,  during  the 
summer  of  1872,  alleging  that  the  stock  had  been 
set  apart  by  the  Credit  Mobilier  to  Mr.  Ames  for  thef 
express  purpose  of  distributing  to  members  of  Con-^ 
gress,  with  the  object  of  creating  in  them  such  an  I 
interest  -in  the  road  that  they  could  be  depended) 
upon  in  all  cases  where  legislation  should  come 
before  Congress  ;  that  Mr.  Ames  had  received  the 
stock  for  that  purpose,  and  had  used  it  for  the  pur- 
pose of  corrupting  member  s  of  Congress  ;  that  while 
he  had  sold  it  to  those  members,  he  had  sold  it  at  a. 
price  far  below  its  actual  value,  thereby  making  it 
in  reality  a  gift  to  them  to  that  extent,  and  in  his 
affidavits  he  mentioned  a  long  list  of  congressmen 
who  had  been  selected,  and  to  whom  the  stock  had 
been  transferred.  This  list,  which  he  claimed  had 
been  furnished  him  by  Mr.  Ames,  contained  the 
names  of  some  who  had  never  been  mentioned  in 
connection  with  the  Credit  Mobilier,  and  who  never 
became  interested  in  it  in  any  way  ;  and,  as  additional 
evidence  upon  this  claim  of  bribery,  Mr.  McComb 
filed  letters,  purporting  to  have  been  written  by  Mr. 
Ames,  and  in  which  he- said  he  had  given  the  stock 


98  THE    CREDIT    MOBILIER 

to  such  and  such  congressmen,  that  he  had  given  it 
where  it  would  do  the  most  good,  and  other  expres- 
sions of  like  import.  It  may  be  important,  in  what 
is  to  follow,  to  understand  the  relations  of  this  suit 
which  Mr.  McComb  brought.  In  the  early  part  of 
1866,  Mr.  H.  G.  Fant,  a  banker  in  Washington,  and 
a  friend  of  Mr.  McComb,  concluded  to  invest 
$25,000  in  Credit  Mobilier  stock,  and  asked  Mr. 
McCoipb  to  subscribe  that  amount  for  him,  and 
draw  on  him  for  the  money  with  which  to  pay  for 
the  shares.  On  the  3d  of  March,  1866,  Mr. 
McComb  made  the  subscription  for  250  shares  at 
par,  and  gave  to  the  treasurer  of  the  Credit  Mobilier 
a  draft  on  Mr.  Fant  for  $25,000.  A  few  days  later, 
Mr.  McComb  was  informed  that  the  draft  had  been 
protested,  whereupon  he  wrote  to  Mr.  Fant  asking 
an  explanation.  Mr.  Fant  replied  that  owing  to 
certain  losses  which  he  had  suffered  in  his  business, 
he  could  not  spare  the  money.  He  came  to  New 
York  in  a  few  days,  and  requested  that  his  offer  be 
left  open  for  a  short  time,  and  perhaps  he  would 
take  the  stock.  The  Credit  Mobilier  at  that  time 
was  in  great  need  of  funds,  and  such  an  acquisition 
would  be  of  the  greatest  benefit  to  them,  and  so  they 
gladly  extended  the  time.  Thirty  days  passed,  but 
still  nothing  was  done.  Some  time  after  this,  Mr. 
McComb  desired  that  the  draft  be  returned  to  him, 
and  that  the  whole  transaction  be  cancelled,  and 
that  the  stock  be  returned  to  the  treasury.  This 
was  done ;  the  sale  was  rendered  void,  and  Mr. 
McComb's    draft   was    returned    to    him.      Nothing 


OF    AMERICA.  99 

more  was  heard  of  this  claim  for  more  than  a  year^ 
and  a  half  after  this.  When  the  contract  had  been 
let  to  Mr.  Ames,  and  his  agreement  given  that  the 
stockholders  of  the  Credit  Mobilier  were  to  share 
those  profits,  the  stock  of  the  Credit  Mobilier 
became  valuable.  One  day  Mr.  McComb  entered 
the  office  and  spoke  to  Mr.  Alley,  Mr.  Durant,  and 
another  of  the  directors,  and  said  he  wanted  a  talk 
with  them  upon  a  certain  subject,  and  asked  when 
they  could  hear  him.  The  following  day  was 
appointed,  and  at  that  meeting  Mr.  McComb  made 
his  claim  that  the  old  subscription  he  had  made  in 
March,  1866,  was  still  open,  and  he  proposed  to  pay 
for  the  stock  now,  and  asked  that  it  be  assigned  to 
him.  The  proposal  was  so  preposterous  that  the 
others  laughed  at  him,  even  his  friend  Durant. 
They  told  him  that  that  had  long  ago  been  can- 
celled, and  that  his  draft  had  been  given  up  to  him, 
and  that  at  his  own  request  all  obligations  against 
him  by  the  Company,  by  reason  of  that  subscription, 
had  been  annulled.  McComb  claimed,  however, 
that  the  draft  had  not  been  returned,  and  that  he 
had  the  right  to  the  stock.  Of  course,  every  direc- 
tor refused  to  recognize  so  baseless  a  claim.  He 
threatened  suit  to  recover  it ;  but  no  heed  was  taken 
of  it.  At  the  meeting  in  New  York,  in  the  early 
part  of  1868,  when  the  stock  in  the  treasury 
was  divided  between  Mr.  Durant  and  Mr.  Ames, 
Mr.  McComb  was  present,  and  again  asserted  his 
claim  to  the  stock,  and  saying  that  he,  as  well  as  the 
others,  had  promised  the  stock  to  his  friends ;  but 


lOO  THE    CREDIT    MOBILIKR 

finally,  as  we  have  seen,  he  consented  to  the  divis- 
ion of  the  stock  between  Mr.  Durant  and  Mr. 
Ames,  thus  effectually  relinquishing  every  right  to 
the  stock  which  he  had  claimed.  But,  even  after 
t'ais,  he  insisted  on  having  the  stock,  and  s  ill  threat- 
ened suit  unless  it  was  given  him.  No  attention 
was  paid  to  him. 

During  the  same  year  he  did  commence  a  suit, 
alleging  the  value  of  the  stock  to  be  very  great,  and 
that  he  was  entitled  to  the  dividends  declared.  The 
dividends  which  he  alleged  had  been  paid  were  very 
largely  in  excess  of  all  that  were  declared  upon  all 
the  contracts  for  the  building  of  the  Pacific  road. 
This  suit  dragged  along  through  the  courts  until 
the  year  1872,  when  more  desperate  measures  were 
resorted  to  to  secure  a  settlement.  Mr.  McComb, 
through  his  counsel,  Judge  Black,  came  to  Mr. 
Alley,  and  said  that  the  best  thing  that  could  be 
done  was  to  settle  the  suits,  as  Mr.  McComb  had 
letters  from  Mr.  Ames,  which  established  the  proof 
of  bribery  on  the  part  of  Mr.  Ames,  and  that  if  those 
letters  were  made  public  it  would  ruin  many  a  man 
then  high  in  official  position,  and  bring  untold 
disgrace  upon  the  country.  Mr.  Alley  replied  that  it 
was  impossible  that  Mr.  Ames  could  ever  have 
written  any  such  letters  —  he  had  too  much  faith  in 
Mr.  Ames  to  even  consider  such  a  thought  —  and 
refused  absolutely  to  entertain  the  proposition  of  a 
settlement.  Mr.  Black  came  again,  and  said  that 
he  would  settle  all  matters  for  $100,000 ;  that  he 
knew  the  contents  of  those  letters,  and  that  there 


OF    AMERICA.  lOI 

was  the  most  convincing  evidence  in  them  not  only 
against  Mr.  Ames,  but  against  many  prominent  men, 
and  among  them  one  of  his  dearest  friends.  So 
earnest  was  he,  and  so  positive,  that  Mr.  Alley  laid 
the  matter  before  Mr.  Ames.  Mr.  Ames  asserted 
positively  that  he  never  had  entertained  any  thought 
of  bribery  ;  that  he  was  an  honorable  man,  and  that 
never  had  he  attempted  in  the  least  to  influence  the 
acts  of  any  man  in  Congress  by  gifts,  or  by  any- 
thing of  pecuniary  value  ;  whatever  he  had  done  he 
was  perfectly  willing  the  whole  world  should 
know ;  that  he  never  had  written  any  letters 
such  as  Mr.  McComb  claimed  to  hold,  nor 
was  he  aware  of  any  expression  in  any  letter 
he  had  ever  written  which  could  be  tortured 
into  such  an  idea,  for  certainly  not  the  faintest 
thought  of  any  such  conduct  had  ever  entered 
his  mind.  He  told  Mr.  Alley  to  say  to  Judge 
Black  that  he  defied  him  in  any  such  attempt  to 
blackmail  him  or  those  he  was  associated  with. 
A  third  time  Judge  Black  came  around,  attempted 
to  eflect  a  settlement  on  the  basis  of  surrendering  the 
letters,  and  ending  the  suit.  So  great  was  the  con- 
fidence of  those  associated  with  Mr.  Ames  in  his 
honor  that  all  attempts  to  arrange  a  settlement  failed. 
At  last  the  letters  were  produced  in  court,  and  before 
long  found  their  way  to  the  public  through  the  New 
York  Sun, 

We  present  copies  of  these  letters  as  they 
appeared  before  the  public,  and  then  shall  take 
occasion  to  comment  upon  them. 


I02  THE    CREDIT    MOBILIER 

It  should  be  remembered  that  these  letters  were 
all  written  by  Mr.  Ames  in  reply  to  letters  written 
him  by  Mr.  McComb,  and  that  all  the  matters 
referred  to  had  been  spoken  of  by  Mr.  McComb. 
At  the  time  that  Mr.  McComb  had  assented  to  the 
division  of  the  stock  of  the  Credit  Mobilier  between 
Mr.  Durant  and  Mr.  Ames,  he  made  the  claim  that 
he  had  promised  a  part  of  his  stock  to  certain  of  his 
friends,  and  when  he  could  not  obtain  the  stock,  he 
wished  Mr.  Ames  to  deliver  a  portion  of  the  stock 
assigned  to  him,  to  Mr.  Bayard  and  Mr.  Fowler ; 
and  now  he  had  written  to  Mr.  Ames  to  know  why 
the  stock  had  riot  been  delivered.  There  was  also 
much  complaint  made  both  by  Mr.  McComb  and 
Mr.  Durant,  and  by  their  friends,  that  Mr.  Ames 
was  selling  this  stock  very  largely  among  his  own 
personal  friends  from  Massachusetts,  thus  seeking 
to  keep  the  control  of  the  corporations  in  his  own 
hands.  This  circumstance  had,  previous  to  this, 
led  to  many  angry  assertions,  but  Mr.  Ames  had 
always  declared  that  such  was  not  his  intention.  It 
was  the  desire  of  all  parties  that  the  stock  should 
be  distributed  over  as  large  a  part  of  the  country  as 
could  be,  in  order  that  all  sections  should  have  an 
interest  in  pushing  forward  this  great  national  work. 
It  was  a  work  in  which  the  whole  country  was 
deeply  interested.  In  Mr.  McComb's  letter  to  Mr. 
Ames,  January  23,  1868,  he  insisted  that  Mr.  Ames 
should  distribute  the  stock  not  wholly  to  his  own 
New  England  friends,  but  to  serve  all  alike.  All 
of  this  stock  had  long  before  been  sold  by  Mr.  Ames 


OF    AMERICA.  IO3 

to  these  parties,  and  it  was  for  the  purpose  of  ful- 
filling his  obligations  to  them  that  the  stock  had 
been  secured  by  Mr.  Ames.  These  sales  had  been 
agreed  upon  during  the  early  part  of  1867,  some 
months  before  the  Ames  contract  had  been  executed  ; 
but  the  parties  who  had  contracted  for  the  stock 
were  not  anxious  to  take  it  while  it  was  not  worth 
par — the  price  which  they  had  agreed  to  pay.  As 
soon,  however,  as  the  Ames  contract  had  gone 
into  effect,  and  work  under  it  commenced,  and  it 
was  decided  that  a  dividend  be  declared,  the  stock 
at  once  rose  in  value,  and  by  the  end  of  December, 
1867,  was  considerably  above  par.  Then  it  was 
that  Mr.  Ames  was  literally  besieged  by  members 
of  Congress,  who  declared  that  they  had  agreed  to 
take  the  stock,  and  wanted  it  delivered.  Many, 
indeed,  came  to  him  in  this  way,  and  asserted  posi- 
tively that  he  had  sold  them  the  stock,  when,  in 
point  of  fact,  the  only  conversation  ever  held  was 
that  when  Mr.  Ames  asked  them  if  they  would  take 
some  of  the  stock  they  replied  that  "they  would 
see.  "  When  they  came  forward  now,  and  insisted 
on  having  the  stock,  it  placed  Mr.  Ames  in  a  diffi- 
cult position,  and  he  was  forced  to  decide  with 
whom  his  engagements  had  been  positive,  and  with 
whom  they  had  been  only  spoken  of.  It  was  in  this 
spirit  that  the  first  of  these  letters  was  written, 
intending  thereby  to  so  present  the  case  to  Mr. 
McComb  that  he  should  no  longer  have  occasion 
to  accuse  him  of  favoring  any  particular  section, 
or  his  own  personal  friends. 


I04  THE    CREDIT    MOBILIER 

We  present  the  letter  in  full : 

Washington,  Jan.  25,   1868. 

H.  S.  McComb,  Esq,^ 

Dear  Sir  : — Yours  of  tlie  23d  is  at  hand,  in  which  you 
say  Senators  Bayard  and  Fowler  have  written  you  in  rela- 
tion to  their  stock.  I  have  spoken  to  Fowler,  but  not  to 
Bayard  ;  I  have  never  been  introduced  to  Bayard,  but  will 
see  him  soon.  You  say  I  must  not  put  too  much  in  one 
locality.  I  have  assigned  as  far  as  I  have  gone  to,  4  from 
Mass.,  I  fromN.  H.,  i  Delaware,  i  Tenn.,  i  Ohio,  2Penn., 
I  Ind.,  I  Maine,  and  I  have  three  to  place,  which  I  shall 
place  where  they  will  do  most  good  to  us.  I  am  here  on 
the  spot,  and  can  better  judge  where  they  should  go.  I 
think  after  this  dividend  is  paid  we  should  make  our  cap- 
ital 4.000.000,  and  distribute  the  new  stock  where  it  will 
protect  us — let  them  have  the  stock  at  par,  and  profits 
made  in  the  future  ;  the  50  per  cent,  increase  on  the  old 
stock,  I  want  for  distribution  here,  and  soon.  Alley  is 
opposed  to  the  division  of  the  bonds  ;  says  we  will  need 
them,  &c.,  &c.  I  should  think  we  ought  to  be  able  to 
spare  them,  with  Alley  and  Cisco  on  the  finance  com- 
mittee :  we  used  to  be  able  to  borrow  when  we  had  no 
credit  and  debts  pressing.  We  are  now  out  of  debt  and 
in  good  credit — what  say  you  about  the  bond  dividend.'* 
—  a  part  of  the  purchasers  here  are  poor,  and  want  their 
bonds  to  sell  to  enable  them  to  meet  their  payment  on  the 
stock  in  the  C.  M.  I  have  told  them  what  they  would 
get  as  dividend,  and  they  expect,  I  think,  the  bonds 
the  parties  receive  as  the  80  per  cent,  dividend ;  we 
better  give  them  the  bonds — it  will  not  amount  to  any- 
thing with  us.  Some  of  the  large  holders  will  not  care 
whether  they  have  the  bonds  or  certificates,  or  they  will 


OF    AMERICA.  IO5 

lend  their  bonds  to  the  company  as  they  have  done  be- 
fore, or  lend  them  money.  Quigley  has  been  here,  and 
we  have  got  that  -j^j  that  was  Underwood's.  I  have  taken 
half,  Quigley  ^,  and  you  ^.  J.  Carter  wants  a  part  of  it ; 
at  some  future  day  we  will  surrender  a  part  to  him. 

Yours  truly, 

Oakes  Ames. 

In  interpreting  any  letter  we  should  always  ascer- 
tain the  style  and  character  of  the  writer.  What 
one  man  would  do  another  would  not.  One  man 
may  be  open  and  free  in  his  utterances,  while 
another  is  guarded  and  careful  in  all  he  says. 
Those  who  have  known  Mr.  Ames  will  bear  out  the 
assertion  that  he  never  stopped  to  consider  the  result 
of  what  he  said  or  did.  He  was  not  a  finely  educated 
man  —  he  was  not  capable  of  drawing  fine  distinc- 
tions in  the  meaning  of  words.  To  those  who  knew 
him,  these  letters  will  show  the  man  —  open,  plain 
and  blunt — as  he  always  was.  When,  therefore, 
he  was  accused  by  Mr.  McComb  of  giving  the  stock 
only  to  certain  personal  friends,  he  naturally  replied 
that  he  had  "  assigned  "  it  to  such  and  such  persons, 
covering  the  entire  country  ;  he  had  made  his  decis- 
ion as  to  whom  the  stock  belonged,  by  reason  of 
prior  engagements.  And  he  had  done  this  among 
men  of  influence,  men  whose  names  would  add 
dignity,  stability  and  strength  to  the  enterprise ; 
whose  names  connected  with  it  would  add  confidence 
among  their  constituents,  and  thus  in  reality  "do 
most  good "  to  the  early  completion   of  the   road. 


I06  THE    CREDIT    MOBILIER 

He  wanted  the  balance  of  the  increase  of  stock  for 
"distribution."  He  had  sold  it  and  the  parties  who 
had  bought  it  wanted  it,  as  appears  very  strongly 
from  the  latter  part  of  his  letter,  where  he  says  the 
"  purchasers  "  want  the  dividends  to  meet  their  pay- 
ments on  the  stock.  There  was  much  opposition  to 
declaring  these  dividends,  and,  as  Mr.  Ames  says, 
this  came  from  Mr.  Alley,  who  insisted  that  before 
the  work  was  done  they  might  need  all  their  funds  — 
and  in  this  he  was  right. 

Mr.  McComb  was  well  aware  of  the  condition  in 
which  Mr.  Ames  was  situated ;  he  knew  that  the 
stock  had  been  long  before  sold  these  parties,  at  a 
time  when  the  stock  was  in  reality  below  par,  and 
here  certainly  no  mference  was  made  that  he  was 
selling  it  below  par.  The  last  clauses  of  this  letter 
have  no  reference  to  the  Credit  Mobilier,  but  to  a 
railroad  in  the  West  m  which  they  were  both  inter- 
ested. 

The  next  letter  is  as  follows : 

Washington,  Jan.  30,  1868. 
H.   S,  McComb, 

Dear  Sir  : — Yours  of  the  28th  is  at  hand,  enclosing  a 
letter  from,  or  rather  to,  Mr.  King.  I  don't  fear  any 
investigation  here.  What  some  of  Durant's  friends  may 
do  in  N.  Y.  courts  can't  be  counted  upon  with  any 
certainty.  You  do  not  understand,  by  your  letter,  what  I 
have  done,  &  am  to  do  with  my  sales  of  stock.  You 
say  none  to  N.  Y.  I  have  placed  some  with  New 
York,,  or  have  agreed  to.  You  must  remember  it  was 
nearly   all   placed   as  you   saw  on  the   list  in  N.    Y.,   & 


OF    AMERICA.  IO7 

there  was  but  6  or  8  m.  for  me  to  place.  I  could 
not  give  all  the  world  all  they  might  want  out  of 
that.  You  would  not  want  me  to  ofter  less  than  i  m.  to 
any  one.  We  allow  Durant  to  place  58,000  to  some  3  or 
4  of  his  friends,  or  keep  it  himself. 

I  have  used  this  where  it  will  produce  most  good  to  us, 
I  think.  In  view  of  King's  letter  and  Washburne's  move 
here,  I  go  In  for  making  our  bond  dividend  in  full.  We 
can  do  it  with  perfect  safety.  I  understand  the  opposition 
to  it  comes  from  Alley ;  he  is  on  the  finance  com'ee 
and  can  raise  money  easy  if  we  come  short,  which  I  don't 
believe  we  shall ;  &  if  we  do  we  can  loan  our  bonds  to 
the  company,  or  loan  them  the  money  we  get  ff-om  the 
bonds.  The  contract  calls  for  the  division,  and  I  say  have 
it.  When  shall  I  see  you  in  Washington  ? 
Yours  truly, 

Oakes  Ames. 

We  stand  about  like  this  : 
Bonds  ist  mortgage,  rec'd  on  525  miles  at  16  m.    8,400,000 
*'  *'  ''     *'     15     *'      **  48  m.        720,000 

''       '^  "•  *'     ''   100     "     "  48  m.    4,800,000 

13,920,000 
10,000,000  sold  &  to  sell,  to  pay  our  debts,         10,000,000 


3,920,000 
80  p'r  cent,  dividend  on  3,700,000  C.  M.  of  A.     3,000,000 


920,000 
Gov't  bond  received  this  day,  -----  960,000 
Due  for  transportation,  400  m.,  one-half  cash,       200,000 

2,080,000 
In  addition  to  this  we  can  draw  Gov't  oond  for  §  of 
the  work  in  advance  of  track,  if  we  desire  it. 


I08  THE    CREDIT    MOBILIER 

Oakes  Ames'  list  of  names  as  showed  to-day  to  me  for 
C.  M.  : 

Blaine,  of  Maine,  3,000. 
Patterson,  N.  Hamp.  3,000. 
Wilson,  Mass.,  2. 
Painter  Rep.  for  Inq.,  3. 
S.  Colfax,  Speaker,  2. 
Elliott,  Mass.,  3. 
Dawes,        ''       2. 
Boutwell,    ''2. 
Bingham  &  Garfield,  Ohio. 
Scofield  &  Kelley,  Penn. 
Fowler,  Tenn. 
Feb.  I,  1868. 

This  list  of  names  attached  to  this  letter  is  in  the 
handwriting  of  Mr.  McComb  himself,  and  he  says 
he  wrote  them  as  Mr.  Ames  read  them  to  him  from 
his  memorandum-book.  It  was  not  pretended,  even 
by  Mr.  McComb,  in  his  evidence  before  the  com- 
mittee, that  this  list  was  written  b}^  Mr.  Ames, 
though  in  his  affidavits  in  the  suit  it  was  set  out  to 
that  effect ;  and  it  was  this  list,  as  well  as  the  letters, 
which  produced  the  great  commotion  through  the 
country.  In  no  other  place  in  their  correspondence 
were  any  names  mentioned.  But  this  list  is 
extremely  faulty,  containing  names  of  men  who 
never  contracted  for  a  share  of  stock,  even  in  the 
most  indirect  manner. 

The  above  letter  is  written  in  reply  to  another 
complaining  letter  from  Mr.  McComb,  in  which  he 
referred  to  an  investigation,  to  which  Mr.  Ames 
merely  replies  that  he  does  not  fear  any  investigation. 


OF    AMERICA.  IO9 

He  was  sure  that  an  investigation  could  do  no 
harm,  for  all  transactions  had  been  honorable,  and 
he  was  willing  they  should  be  known. 

In  fact,  when  a  motion  was  made  in  the  House  for 
an  investigation,  no  particular  opposition  was  made 
to  it,  and  especially  by  those  who  have  been  named 
as  takers  of  these  bribes.  The  records  of  Congress 
show  that  of  all  these  men  who  have  been  named  as 
holding  the  stock,  Mr.  Brooks  is  the  only  one  who 
was  opposed  to  it,  or  who  did  not  vote  for  it,  and  he 
did  not,  for  special  reasons  which  he  assigned,  but 
was  not  opposed  to  an  investigation.  The  remarks 
which  were  made  to  the  former  letter  will  apply 
here,  as  to  the  distribution  of  the  stock.  The 
Washburne  move  spoken  of  was  the  motion  for  the 
investigation,  which  we  have  seen  was  voted  for 
by  all  these  men  who  were  interested  in  Credit 
Mobilier.  If,  then,  this  stock  was  distributed  for  the 
purpose  of  influencing  the  legislative  action  of  these 
men,  how  utterly  it  failed !  He  "  used  the  stock 
where  it  would  produce  most  good,"  but  that  was 
among  those  men  who,  as  said  in  reference  to  the 
former  letter,  would  add  dignity,  stability  and 
strength  to  the  organization.  No  reference  was 
intended  to  legislative  action,  for  none  was  contem- 
plated, none  was  feared,  and  had  any  been  made  it 
would  not  have  received  opposition.  In  this  letter 
he  again  refers  to  the  bond  dividend,  again  speaks 
of  Mr.  Alley's  opposition  to  it,  but  thinks  it  can  be 
made  with  safety,  for  should  they  need  money,  it 
could  easily  be  raised  with  such  a  man  as  Mr.  Alley 


no  THE    CREDIT    MOBILIER 

on  the  finance  committee,  and  then  says  that  his 
contract  called  for  the  dividend,  and  he  wanted  it. 
He  then  makes  a  brief  statement,  showing  how  they 
would  stand  after  making  the  dividend. 

Washington,  Feb.  22,  1868. 

H.   S.  McComb^  Esq.^ 

Dear  Sir  : — ^Yours  of  the  21st  is  at  hand  ;  am  glad  to 
hear  that  you  are  getting  along  so  well  with  Mr.  West, 
and  hope  you  will  bring  it  out  all  satisfactory,  so  that  it 
will  be  so  rich  that  we  can  not  help  going  into  it.  I 
return  you  the  paper  by  mail  that  you  ask  for.  You  ask 
me  if  I  will  sell  some  of  my  U.  P.  R.  R.  stock.  I  will 
sell  some  of  it  at  par,  C.  M.  of  A.  I  don't  care  to  sell. 
I  hear  that  Mr.  Bates  offered  his  at  $300,  but  I  don't  want 
Bates  to  sell  out.  I  think  Grimes  may  sell  a  part  of  his  at 
$350.  I  want  that  $14,000  increase  of  the  Credit  Mobil- 
ier  to  sell  here.  We  want  more  friends  in  this  Congress. 
&  if  a  man  will  look  into  the  law  (&  it  is  difficult  for 
them  to  do  it  unless  they  have  an  interest  to  do  so),  he 
can  not  help  being  convinced  that  we  should  not  be  inter- 
fered with.     Hope  to  see  you  here  or  at  N.  Y.  the  nth. 

Yours  truly, 

Oakes  Ames. 

The  first  part  of  this  letter  relates  to  matters 
entirely  foreign  to  the  Credit  Mobilier.  In  Mr. 
McComb's  letter,  the  question  was  asked  if  Mr. 
Ames  would  sell  his  U.  P.  R.  R.  stock.  This  he 
did  not  care  to  do,  and  then  he  speaks  of  the  price 
of  Credit  Mobilier  stock,  in  reply  to  Mr.  McComb's 
questions ;  as  to  these  values  we  shall  speak  further 


OF    AMERICA.  Ill 

on,  only  here  let  us  say  that  while  the  price  of  the 
stock  at  the  date  of  this  letter  may  have  been  as 
specified,  it  is  by  no  means  a  conclusion  that  that 
was  its  price  before  December,  when  the  stock  was 
sold  these  members  of  Congress.  The  only  words 
that  reflect  upon  Mr.  Ames  are  in  relation  to 
"  friends  in  Congress,"  but  as  we  have  already 
spoken  of  this,  and  shall  have  occasion  to  refer 
to  it  again,  we  need  here  only  refer  to  our  former 
remarks,  asserting  that  it  would  be  only  a  natural 
consequence,  for  a  man  of  his  bluntness,  to  make 
use  of  such  expressions.  Then,  too,  it  should  be 
borne  in  mind  that  these  letters  were  written  by  Mr. 
Ames  for  the  very  purpose  of  quieting  the  com- 
plaints of  Mr.  McComb,  and  of  showing  to  him  that 
the  writer  was  not  working  for  his  own  personal 
gratification,  but  for  the  best  good  of  all  those  with 
whom  he  was  associated. 

The  efiect  of  these  letters  upon  the  public  mind 
was  like  wildfire.  A  presidential  campaign  was  in 
progress,  and  most  of  the  men  whose  names  were 
given  were  candidates  for  ofiice.  Without  stopping 
to  consider,  they  denied  all  and  every  connection 
with  the  Credit  Mobilier,  —  denied  that  they  had 
ever  invested  a  dollar  in  the  enterprise,  or  ever 
received  a  dollar  from  such  investment,  either 
directly  or  indirectly-. 

These  denials  are  all  matters  of  history,  and  do 
not  properly  belong  to  a  work  of  this  nature.  The 
papers  of  those  days  were  filled  with  the  allegations 
of  corruption  and  bribery.     The  names  of  those  who 


112  THE    CREDIT    MOBILIER 

had  stood  highest  in  the  national  councils  were  ban  • 
died  about  and  made  by-words  for  infamy.  Those 
who  denied  their  connection  did  so  boldly,  firmly 
believing  that,  when  investigation  came,  as  they 
knew  it  must  come,  Mr.  Ames  would  help  them 
through,  and  clear  them  from  all  blame.  As  long 
as  it  was  through  their  connection  with  Mr.  Ames 
that  they  had  become  involved  in  these  investments, 
they  calculated  that  he  would  stand  by  them,  and 
assume  the  responsibility,  and  by  his  testimony  cor- 
roborate their  denials.  But  they  learned  that  Oakes 
Ames  would  tell  the  truth,  and  as  a  consequence  their 
denials  were  found  to  be  false.  The  denials  served 
however  a  temporary  purpose,  and  all  was  moving 
along  smoothly,  until  Congress  met  in  December, 
1872,  when  the  whole  country  seemed  to  unite  in  the 
demand  for  an  investigation  of  these  charges.  There 
was  a  frenzy  of  excitement  over  it.  The  disgrace 
which  had  come  upon  the  country  was  so  great  that 
it  was  imperative  something  should  be  done  to  dis- 
prove these  allegations  of  corruption  in  our  national 
councils,  or  else  to  punish  the  guilty  as  they  deserved. 
As  soon  as  the  session  of  Congress  which  con- 
vened in  December,  1872,  was  opened,  the  Speaker, 
James  G.  Blaine,  called  Mr.  S.  S.  Cox  to  the  chair, 
and,  from  his  position  on  the  floor,  spoke  of  these 
rumors  that  had  appeared  in  the  press  throughout 
the  country,  and  asked  that  a  committee  be  appointed 
to  investigate  the  matters  therein  alleged.  No 
objection  was  made  to  the  motion,  which,  as  passed, 
was  as  follows  : 


OF    AMERICA.  II3 

W/icrcas  accusations  have  been  made  in  the  public 
press,  founded  on  the  alleged  letters  of  Oakes  Ames,  a 
Representative  from  Massachusetts,  and  upon  the  alleged 
affidavit  of  Henry  S.  McComb,  a  citizen  of  Wilmington, 
in  the  State  of  Delaware,  to  the  effect  that  members  of 
this  House  were  bribed  by  Oakes  Ames  to  perform  cer- 
tain legislative  acts  for  the  benefit  of  the  Union  Pacific 
Railway  Company,  by  presents  of  stock  in  the  Credit 
Mobilier  of  America,  or  by  presents  of  a  valuable  character 
derived  therefrom  :  Therefore 

Resolved^  That  a  special  committee  of  five  members  be 
appointed  by  the  Speaker  pro  tempore^  whose  duty  it 
shall  be  to  investigate  and  ascertain  whether  any  member 
of  this  House  was  bribed  by  Oakes  Ames,  or  any  other 
person  or  corporation,  in  any  matter  touching  his  legisla- 
tive duty. 

Resolved  further ^  That  the  committee  have  the  right 
to  employ  a  stenographer,  and  that  they  be  empowered  to 
send  for  persons  and  papers. 

The  following  committee  was  appointed : 

Luke  P.  Polland,  of  Vermont, 
Nathaniel  P.  Banks,  of  Massachusetts, 
James  B.  Beck,  of  Kentucky, 
William  E.  Niblack,  of  Indiana, 
George  W.  McCrary,  of  Iowa. 

This  committee  entered  upon  their  duties  as  soon 
as  all  the  preliminaries  could  be  arranged,  and  con- 
ducted their  examination  each  day  until  about  the 
middle  of  the  February  following,  having,  in  the 
meantime,  examined  every  person  who  had  any 
knowledge  of  the  subject  of  their  inquiries.  Every 
member    of     Congress    whose     name     had     been 

n 


114  "^^^    CREDIT    MOBILIER 

mentioned  as  having  had  an  interest  in  the  Credit 
Mobilier  came  before  the  committee  and  gave  his 
testimony.  In  only  a  few  instances  did  any  of  these 
witnesses  deny  having  any  connection  with  the 
Credit  Mobilier,  or  that  they  had  engaged  to  take 
stock  from  Mr.  Ames.  For  some  time  after  the 
committee  commenced  their  investigation  they  met 
with  closed  doors,  as  is  the  usual  practice  of  such 
committees ;  but  owing  to  the  garbled  reports 
that  appeared  in  the  press,  and  the  great  interest 
which  spread  through  the  country,  the  doors  of  the 
committee-room  were  thrown  open,  and  from  this 
time  the  investigation  became  public,  and  full  reports 
of  the  proceedings  appeared  in  the  daily  papers 
throughout  the  land  Whatever  may  be  said  of  the 
work  of  this  committee,  no  one  can  charge  that  they 
attempted  anything,  in  their  examinations  of  the 
witnesses,  but  to  arrive  at  the  exact  truth.  The 
examination  was  thorough  and  exhaustive,  and  on 
the  i8th  of  February,  1873,  they  submitted  their 
report  to  the  House.  Much  of  the  substance  of  the 
report  will  appear  in  the  following  pages,  in  so  far 
as  it  relates  to  the  connection  with  the  members  of 
Congress. 

During  the  progress  of  this  investigation,  at  the 
time  it  was  proposed  to  make  the  investigation  open 
and  public,  Mr.  Wilson  of  Indiana,  on  January  6, 
1873,  presented  the  following  resolution,  which  was 
adopted  : 

Resolved^  That  a  select  committee  of  five  members 
of  this    House   be  appointed    by  the  Speaker,  and  such 


OF    AMERICA.  II5 

committee  be,  and  is  hereby  instructed  to  enquire  whether 
or  not  any  person  connected  with  the  organization  or  associ- 
ation commonly  known  as  the  *' Credit  Mobilier, "  now 
holds  any  of  the  bonds  of  the  Union  Pacific  Railroad 
Company,  for  the  payment  of  which,  or  the  interest 
thereon,  the  United  States  is  in  any  way  liable ;  and 
whether  or  not,  such  holders,  if  any,  or  their  assignees, 
of  such  bonds,  are  holders  in  good  faith,  and  for  value,  or 
procured  the  same  illegally  or  by  fraud,  and  whether  or 
not  the  United  States  may  properly  refuse  to  pay  interest 
thereon,  or  the  principal  thereof,  when  the  same  shall 
become  due,  and  whether  or  not  any  relinquishment  of 
first  mortgage  lien  that  may  heretofore  have  been  made 
by  the  United  States  with  reference  to  the  bonds  of  said 
Railroad  Company  may  be  set  aside,  and  to  inquire  into 
the  character  and  purpose  of  such  organization,  and  what 
oflicers  of  the  United  States  or  members  of  Congress  have 
at  any  time  been  connected  therewith,  what  connection  it 
had  with  the  contracts  for  the  construction  of  said  Union 
Pacific  Railroad  Company,  and  to  report  the  facts  to  this 
House,  together  with  such  bill  as  may  be  necessary  to 
protect  the  interests  of  the  United  States  on  account  of 
any  of  the  bonds  of  the  class  hereinbefore  referred  to ; 
and  said  committee  is  authorized  to  send  for  persons  and 
papers,  and  to  report  any  time. 

On  the  following  day  the  Speaker  appointed  as 
that  committee 

J.  M.  Wilson,  of  Indiana, 
Samuel  Shellabarger,  of  Ohio, 
George  F.  Hoar,  of  Massachusetts, 
Thomas  Swann,  of  Maryland, 
H.  W.  Slocum,  of  New  York. 


Il6  THE    CREDIT    MOBILIER 

On  the  loth  January  the  committee  met  and 
commenced  the  investigation,  and  continued  that 
investigation  until  the  19th  of  February,  and  sub- 
mitted their  report  to  the  House  on  the  20th  of 
February. 

From  this  time  on  there  were  two  committees  of 
investigation  at  work  upon  the  Credit  Mobilier,  and 
its  connection  with  the  building  of  the  Union  Pacific 
Railroad.  Their  objects  were  different,  but  were 
intended  to  cover  the  entire  ground.  By  an  exam- 
ination of  the  resolutions  creating  them,  it  will  be 
seen  that  the  first  committee  appointed,  and  gener- 
ally known  as  the  "  Polland  Committee, "  from  its 
chairman,  had  to  investigate  the  connection  of  the 
various  members  of  Congress  with  the  Credit 
Mobilier,  and  discover,  if  possible,  whether  any 
bribery  had  been  used  by  "  Mr.  Ames,  or  any  other 
person  or  corporation, "  in  order  to  procure  the 
influence  of  members  of  Congress  in  legislation  to 
be  brought  before  Congress ;  while  the  other  com- 
mittee, known  as  the  "  Wilson  Committee,  "  from  its 
chairman,  was  to  investigate  the  connection  of  the 
Credit  Mobilier  with  the  construction  of  the  Union 
Pacific  Railroad,  and  to  discover  if  any  illegal  means 
had  been  used  whereby  the  government  had  been 
defrauded,  and  to  ascertain  whether  the  government 
could  recede  from  the  agreement  to  accept  a  second 
lien  for  the  loan  of  its  bonds  to  the  road. 

We  have,  in  the  former  part  of  this  work,  had 
occasion  to  deal  almost  entirely  with  the  province  of 
this  latter,  the  "Wilson  Committee,"  and  it  will  be 


OF    AMERICA.  11*J 

unnecessary  now  to  go  over  any  of  the  details  of 
that  investigation.  The  work  of  that  committee 
was  intended  to  be  thorough,  as  was  that  of  the  Pol- 
land  committee.  Yet,  when  we  come  to  the  report 
as  written  by  the  committee,  we  must  dissent  from 
the  conclusions  reached  by  them.  They  could  not, 
at  least  they  did  not,  understand  the  relations  exist- 
ing between  the  Credit  Mobilier  and  the  seven 
trustees,  and  the  Union  Pacific  road.  In  this  they 
were  entirely  at  fault,  and  it  was  not  surprising  that 
they  should  be,  for  to  this  day,  those  who  have  even 
given  the  subject  much  close  attention,  have  failed 
to  understand  the  nice  distinctions  that  existed.  The 
Credit  Mobilier  had  nothing  to  do  with  the  Ames 
contract ;  it  never  received  a  dividend  from  that  con- 
tract, and  no  dividend  was  ever  declared  by  the 
Credit  Mobilier,  excepting  one  of  12  per  cent,  from 
the  money  paid  it  by  the  trustees.  The  committee 
did  not  discern  that  the  Credit  Mobilier  had  lost  its 
entire  capital  in  the  construction  of  the  road ;  or  that 
it  had  been  cheated  and  robbed  by  those  who  first 
had  its  management ;  they  failed  absolutely  to  under- 
stand the  relations  of  the  government  to  the  Pacific 
roads,  and  imagined  that  the  government  had 
loaned  them  a  large  amount  of  money  for  the  con- 
struction of  the  road,  when  in  fact  the  government 
had  never  loaned  them  one  cent.  The  utmost  that 
had  been  done  was  to  loan  them  the  credit  of  the 
government,  it  being  in  reality  the  same  as  an 
accommodation  note,  which  if  paid  when  due  would 
be  no  loss  to  any  one,  and   to  secure   this  payment 


Il8  THE    CREDIT    MOBILIER 

the  government  had  a  second  mortgage  on  the  road. 
They  could  not  comprehend  the  mighty  difficulties 
that  encompassed  the  road  on  every  side  during  its 
construction,  but  they  judged  it  as  though  all  those 
great  obstacles  had  been  removed,  and  the  road 
was  being  constructed  at  the  time  the  report  was 
being  made.  They  declared  that  so  great  had  been 
the  fraud  practiced  on  the  government  by  these  pro- 
ceedings, that  the  goverment  would  have  a  right, 
but  for  the  presence  of  a  few  innocent  stockholders, 
to  declare  the  franchises  forfeited.  The  committee 
could  not  understand  the  relations  of  cost  and  profits, 
and  in  their  attempt  to  show  some  great  fraud, 
made  out  the  profits  of  construction  to  amount  to 
more  than  $43,000,000,  with  a  cash  value  of  some 
$23,000,000,  when  the  cash  value  of  the  profit 
actually  made  was  but  a  trifle  over  $8,000,000.  The 
minds  of  the  committee  were  so  evidently  biased 
that  they  could  see  nothing  in  its  true  light,  could 
understand  nothing  as  it  actually  was,  but  thought 
(probably  because  so  many  of  their  constituents  did, 
and  they  were  very  anxious  to  be  returned  to  Con- 
gress) that  there  was  fraud  on  every  hand,  and  that 
no  men  could  carry  through  so  gigantic  a  scheme 
and  remain  honest.  The  committee  concluded  their 
report  by  recommending  the  passage  of  a  bill,  which 
we  understand  was  the  product  of  the  able  mind 
of  Hon.  George  F.  Hoar,  of  Massachusetts,  which 
instructed  the  attorney-general  to  institute  a  suit 
against  every  one  who  had  ever  received  any  of  the 
dividends  declared  from  the  construction  of  the  road. 


OF   AMERICA.  II9 

to  recover  such  dividends.  The  bill  is  a  model  for 
future  generations  to  follov/,  and  w^ill  ever  stand  as  a 
most  beautiful  combination  of  English  v^ords,  but  it 
would  require  tw^o  or  three  acts  of  Congress  to 
understand  its  objects  and  intent. 

In  consequence  of  this  report,  Congress,  in  1876, 
instructed  the  attorney-general  to  institute  a  suit  in 
equity  for  the  recovery  of  all  property  wrongfully 
appropriated. 

The  statute  under  which  the  suit  was  brought 
authorized  a  moneyed  decree  in  favor  of  the  Rail- 
road Company  for  money  due  for  capital  stock,  or 
money  or  property  received  from  it  on  fraudulent 
contracts,  or  for  money  or  property  which  ought  in 
equity  to  belong  to  the  company  ;  and  it  authorized 
a  decree  in  favor  of  the  United  States  or  the  com- 
pany for  money,  bonds,  or  lands  wrongfully  received 
from  the  United  States  which  ought  in  equity  to  be 
paid  or  accounted  for. 

The  Supreme  Court  of  the  United  States  in  1879, 
has  affirmed  a  decision  previously  rendered  in  the 
United  States  Circuit  Court  of  Connecticut,  upon 
the  suit  thus  instituted,  and  has  decided  that 

This  bill  exhibits  no  right  to  relief  on  the  part  of  the 
United  States  founded  on  the  charter  contract.  The 
company  has  constructed  its  road  to  completion,  keeps  it 
in  running  order  and  carries  for  the  government  all  that 
is  required  of  it.  It  owes  the  government  nothing  that  is 
due,  and  the  government  has  the  security  which  by  law  it 
provided.  Nor  does  the  bill  show  anything  which  author- 
izes the  United  States,  as  the  depository  of  a  trust,  public 
or  private,  to  sustain  the  suit. 


I20  THE    CREDIT    MOBILIER. 

The  Court  adds : 

The  truth  is,  that  the  persons  who  were  actually 
defrauded  by  these  transactions,  if  any  such  there  be,  were 
the  few  bona-Jide  holders  of  the  stock  of  the  corporation, 
who  took  no  part  in  these  proceedings,  and  had  no  inter- 
est in  the  fraudulent  contracts.  But  it  is  not  alleged  that 
there  were  any  such. 

We  need  not  pursue  the  report  of  the  Wilson 
committee  any  further.  We  have  attempted  to 
show  the  true  relations  of  the  Credit  Mobilier  and 
the  Union  Pacific  Railroad,  also  the  relations  be- 
tween the  Credit  Mobilier  and  the  trustees.  We 
hope  we  have  made  the  subject  plain.  The  compli- 
cations were  great,  the  distinctions  finely  drawn. 
But  the  positions  taken  by  the  parties  at  the  time 
have  been  sustained  by  the  highest  court  of  justice 
in  the  world ;  their  position  has  been  declared 
impregnable,  and  no  court  has  been  found  to  declare 
that  fraud  was  used  against  the  government  in  the 
construction  of  the  Union  Pacific  Road. 

This  was  the  report  of  the  "Wilson  Committee." 
The  evidence  has  been  alluded  to  in  the  former  part 
of  this  work.  Here  we  leave  this  portion  of  the 
subject,  and  proceed  to  the  work  of  the  other  com- 
mittee of  investigation. 


VIII. 
THE    POLLAND    COMMITTEE. 

nr^  HE  first  witness  examined  by  the  Polland  com- 
mittee  (after  the  statement  of  James  G.  Blaine) 
was  Mr.  H.  S.  McComb.  His  testimony  was  to  the 
eftect  that,*in  conversations  with  Mr.  Ames,  admis- 
sions were  made  by  Mr.  Ames  that  he  had  used  the 
stock  of  the  Credit  Mobilier  for  the  purpose  of 
influencing  members  of  Congress  to  vote  in  the  inter- 
ests of  the  Union  Pacific  Railroad ;  that  Mr.  Ames 
had  told  him  that  such  was  his  intention  in  getting 
the  stock,  and  that  once  Mr.  Ames  asked  him  if  he 
did  not  consider  it  a  good  use  of  the  stock  which  he 
gave  to  Mr.  Colfax,  then  Speaker  of  the  House,  in 
view  of  the  decision  or  ruling  made  by  him  on  the 
Washburne  motion.  Mr.  McComb  alleged  that,  by 
some  parliamentary  ruling,  the  Speaker  had  killed 
such  motion.  The  evidence  was  also  positive  that 
Mr.  McComb  overheard  a  conversation  between 
Mr.  Brooks  and  Mr.  Alley,  in  which  Mr.  Brooks 
demanded  the  giving  to  him  of  fifty  shares  of  the 
Credit  Mobilier  stock,  and  promising,  if  that  was 
done,  that  he  would  look  out  for  the  Democratic  side 
of  the  House,  in  all  legislation  concerning  the  Union 
Pacific  Railroad ;  and  that,  in  consideration  of  such 

121 


122  THE    CREDIT    MOBILIER 

promise,  Mr.  Alley  did  cause  to  be  issued  to  Mr. 
Brooks  the  fifty  shares  of  stock  which  he  demanded. 
Mr.  McComb's  testimony  in  regard  to  this  was  most 
positive  and  direct,  and  he  fixed  the  time  within 
fifty-seven  days  of  when  it  occurred  ;  that  there  were 
several  conversations  concerning  it,  but  all  occurred 
within  this  time,  which  he  could  fix  by  the  absence 
of  Dr.  Durant  in  Europe,  and  that  he  always 
thought  Mr.  Alley  was  taking  advantage  of  such 
absence,  in  giving  away  this  stock. 

Mr.  McComb  also  produced  the  letters  which  we 
have  set  out,  and  commented  upon  them  in  an  unfa- 
vorable light ;  he  claimed  that  the  letters  were  writ- 
ten in  a  manner  denoting  great  confidence,  such  as 
Mr.  Ames  had  always  placed  in  him ;  that  Mr. 
Ames  had  told  him  many  times  that  he  had  used  the 
stock  assigned  him,  for  the  purpose  of  influencing 
members  of  Congress,  and  that  that  was  the  purpose 
for  which  the  Credit  Mobilier  had  given  him  the 
stock  ;  that  though  he  had  offered  it  for  par,  it  was 
at  the  time  ofl^ered  worth  far  more  than  that. 

No  other  evidence  was  tendered  or  produced  upon 
this  point,  and  the  entire  testimony  regarding  any 
admission  by  Mr.  Ames,  or  any  conversations  by 
him,  was  that  of  Mr.  McComb.  His  testimony  in 
this  respect  stands  unsupported  and  alone,  except 
for  what  color  may  be  given  it  by  the  letters  which 
he  produced,  and  which  Mr.  Ames  never  denied 
having  written.  A  large  amount  of  the  testimony 
related  to  the  work  of  the  Credit  Mobilier,  which 
we  have    already   considered,   and   the  manner  in 


OF    AMERICA.  1 23 

which  members  of  Congress  had  invested  in  the 
stock ;  but  with  the  testimony  of  Mr.  McComb,  his 
assertions  stand  exactly  as  he  left  them,  to  be  met 
and  overturned  by  a  multitude  of  witnesses. 

Mr.  Ames  denies,  positively,  that  he  ever  had 
any  such  conversations  with  Mr.  McComb ;  denies 
that  he  ever  made  any  such  admissions ;  denies  that 
he  ever  entertained  a  thbught  of  influencing  a  mem- 
ber of  Congress,  in  his  legislative  action ;  claims 
that  he  sold  the  stock  to  the  several  members  of 
Congress  at  a  time  when  that  stock  was  not  above 
par,  at  a  time  when  it  was  being  freely  offered  to 
the  public,  without  finding  a  buyer,  and  that  it  was 
sold  to  those  who  bought  it  only  upon  the  represen- 
tations of  Mr.  Ames  that  it  would  be  a  good  paying 
investment ;  that  he  had  no  thought  of  corrupting 
members,  for  he  had  no  legislation  to  ask  for,  and 
had  no  reason  to  expect  any  adverse  to  the  interests 
of  the  Union  Pacific  road  ;  that  the  letters  which  he 
had  written  Mr.  McComb  were  in  response  to  others 
written  by  Mr.  McComb,  and  in  reply  to  questions 
proposed  by  him  ;  and  in  view  of  the  struggle  Mr. 
McComb  was  making  to  gain  possession  of  this 
stock,  he  naturally  addressed  him  in  such  language 
as  would  tell  him  that  he  was  working  for  the  pros- 
perity and  success  of  an  enterprise  in  which  Mr. 
McComb  had  a  deep  interest,  like  himself.  The 
letters  were  framed  for  a  specific  purpose,  and  to 
accomplish  a  particular  end  ;  their  bearings  were 
not  reflected  upon  or  considered  ;  they  were  written 
hastily  in  the  press  of  business,  and  in  that  freedom 


124  THE    CREDIT    MOBILIER 

that  usuall}'  exists  between  parties  embarked  in  the 
same  enterprise  ;  that  he  was  never  confidential  with 
Mr.  McComb,  in  fact,  was  opposed  to  him,  in  his 
management  of  affairs.  He  made  no  denial  of  sel- 
ling stock  to  members  of  Congress,  but  maintained 
it  was  all  sold  before  there  had  been  any  increase 
in  the  value  of  that  stock,  and  that  he  sold  it  at  its 
full  value.  Thus  the  evidence  of  these  two  parties 
stood  directly  opposed  to  each  other,  and  it  was  to 
be  decided  which  was  true. 

The  evidence  of  all  witnesses  was  to  the  effect 
that  the  stock  was  sold  by  Mr.  Ames  immediately 
after  the  assembling  of  Congress,  in  the  winter  of 
1867-68,  or  even  before  that,  —  certainly  not  later 
than  a  few  weeks  after  the  opening  of  Congress. 
This  point  we  shall  refer  to  further  on.  The  records 
of  Congress  showed  that  no  legislation  affecting  the 
Pacific  roads  was  before  Congress  at  the  time,  and 
that  none  of  importance  was  brought  up  for  nearly 
two  years  after  the  road  was  completed.  It  was 
shown  by  five  witnesses  that  the  conversations 
between  Mr.  Brooks  and  Mr.  Alley  could  not  have 
occurred ;  for  at  the  time  which  was  so  positively 
sworn  to,  Mr.  Alley  was  out  west  on  the  line  of  the 
road  then  being  built ;  that  Mr.  Alley  had  nothing 
to  do  regarding  the  issue  of  the  stock  to  Mr.  Brooks, 
as  that  was  a  matter  decided  upon  by  a  large  num- 
ber of  the  principal  stockholders,  and  all  of  whom 
signed  an  agreement  consenting  to  its  sale  to  Mr. 
Brooks, —  an  agreement  which  Mr.  Alley  did  not  sign, 
but  which  Mr.  McComb   did  ;  and  that  agreement 


OF    AMERICA.  1 25 

was  before  the  committee  ;  and  it  was  shown  that 
the  Speaker,  Mr.  Colfax,  had  never  made  any  such 
ruling  as  testified  to  by  Mr.  McComb,  and  conse- 
quently Mr.  Ames  could  never  have  made  the  asser- 
tion attributed  to  him  regarding  it. 

It  would,  of  course,  be  impossible  to  set  out  here 
all  this  mass  of  testimony,  nor  would  it  be  in  accord- 
ance w^ith  the  design  of  this  work.  We  must  content 
ourselves  with  a  brief  review  of  the  testimony  con- 
cerning each  member  of  Congress  whose  name  was 
mentioned  as  a  holder  of  Credit  Mobilier  stock. 

We  shall  attempt  merely  to  give  the  result 
regarding  each,  excepting  in  those  cases  where 
there  were  such  strong  denials  of  any  connection 
with  the  stock,  and  which  denials  were  proved  to  be 
false,  and  also  where  the  committee  refer  to  the 
evidence  in  support  of  their  conclusions. 

We  shall  commence  with  some  of  the  members  of 
the  Senate,  and  first  with 

JOHN    A.    LOGAN,    OF    ILLINOIS. 

In  December,  1867,  Mr.  Logan  made  an  arrange- 
ment with  Mr.  Ames  to  purchase  ten  shares  of 
Credit  Mobilier  stock  upon  Mr.  Ames'  recommenda- 
tion that  it  was  valuable.  No  payment  was  made  in 
consideration  of  the  agreement,  at  any  time,  and  no 
stock  was  ever  delivered.  In  June,  1868,  Mr.  Ames 
stated  to  Mr.  Logan  that  he  had  two  dividends  on 
his  stock  in  the  Credit  Mobilier,  one  of  80  and  the 
other  of  60  per  cent.  ;  and  that,  deducting  the  $1,000 
due  on  the  stock,  there  was  a  balance  in  his  favor 


126 


THE    CREDIT    MOBILIER 


of  $329,  which  was  paid  Mr.  Logan  by  check  on  the 
sergeant-at-arms,  which  check  was  paid.  On  the 
loth  of  July  following,  Mr.  Logan  becoming  con- 
vinced that  there  might  be  trouble  about  it,  returned 
the  money  to  Mr.  Ames,  stating  he  had  concluded 
not  to  take  the  stock,  and  there  the  transaction  ended, 
Mr.  Logan  having  no  further  interest  in  it.  Mr. 
Logan  at  that  time  was  a  member  of  the  House. 

ROSCOE    CONKLING,    OF    NEW    YORK. 

Mr.  Conkling  does  not  appear  to  have  been  con- 
nected in  any  way  with  the  stock  of  the  Credit 
Mobilier  or  of  the  Union  Pacific  Railroad  Company, 
and  consequently  could  be  in  no  way  affected  thereby. 

HENRY    WILSON. 

On  or  about  December,  1867,  Senator  Wilson 
contracted  for  20  shares  of  the  Credit  Mobilier  stock 
in  behalf  of  his  wife,  paying  in  cash  therefor  $2,000, 
receiving  a  guarantee  from  Mr.  Ames.  Mr.  Wilson 
soon  became  dissatisfied  with  the  transaction,  and 
upon  the  agreement  of  Mr.  Ames,  the  sale  was 
thrown  up.  Mr.  Ames  returned  the  $2,000,  and 
Mr.  Wilson  returned  all  dividends  he  had  received, 
and  also  paid  to  his  wife  $814,  which  she  would 
have  been  entitled  to  as  dividends.  The  purchase 
money  belonged  to  Mrs.  Wilson. 

JAMES    G.    BLAINE. 

Mr.  Ames  requested  Mr.  Blaine  to  take  ten  shares 
of  the  stock,  recommending  it  as  a  good  investment. 
Upon  consideration    Mr.  Blaine    concluded   not   to 


OF    AMERICA.  I  27 

take  the  stock,  and  never  did  take  it ;  never  paid  or 
received  anything  on  account  of  it ;  and  never  had 
any  interest,  direct  or  indirect,  in  Credit  Mobilier 
stock,  or  stock  of  the  Union  Pacific  Railroad  Com- 
pany. 

HENRY    L.    DAWES. 

In  December,  1867,  Mr.  Dawes  made  application 
to  Mr.  Ames  for  the  purchase  of  a  thousand  dollar 
bond  of  the  Cedar  Rapids  road  of  Iowa ;  but  on  the 
recommendation  and  guarantee  of  Mr.  Ames  he  took 
ten  shares  of  Credit  Mobilier  stock,  paid  $800  down, 
and  in  a  few  days  the  balance.  In  June,  1868,  there 
was  a  dividend  of  60  per  cent.  paid.  Mr.  Ames 
handed  him  $400,  placing  the  other  $200  to  his 
credit  on  other  accounts  between  them.  Some  time 
after,  hearing  of  the  litigation  concerning  the  stock, 
Mr.  Dawes  desired  to  rescind  the  sale,  which  was 
done.  Mr.  Dawes  was  allowed  10  per  cent,  for  his 
money,  and  returned  the  dividends  he  had  received. 
He  had  no  other  benefit  under  the  contract  than  to 
get  10  per  cent,  for  his  money,  and  after  the  settle- 
ment had  no  further  interest  in  the  stock. 

GLENNI    W.    SCOFIELD,    OF    PENNSYLVANIA. 

In  December,  1867,  Mr.  Scofield  applied  to 
Mr.  Ames  to  purchase  some  Cedar  Rapids  stock, 
when  Mr.  Ames  suggested  that  he  buy  some  Credit 
Mobilier  stock,  and  explaining  that  it  was  a  con- 
tracting company  organized  under  the  laws  of 
Pennsylvania,  and  was  engaged  in  building  the 
Union  Pacific  Railroad,  and  said  he  would  like  to 


128  THE    CREDIT    MOBILER 

see  some  Pennsylvanians  in  it,  and  guaranteed  Mr. 
Scofield  eight  per  cent,  on  his  investment.  Mr. 
Scofield,  a  little  later,  paid  $1,041  for  ten  shares, 
and  received  upon  the  same  the  dividend  of  eighty 
per  cent,  in  bonds,  and  also  the  cash  dividend  of 
sixty  per  cent.  Before  the  close  of  the  session  Mr. 
Scofield,  for  some  reason,  became  disinclined  to 
hold  the  stock,  and  made  arrangements  with  Mr. 
Ames  to  rescind  the  sale,  which  was  done,  and 
thereafter  Mr.  Scofield  had  no  further  interest. 

JOHN    A.    BINGHAM,    OF    OHIO. 

In  December,  1867,  Mr.  Ames  advised  Mr.  Bing- 
ham to  invest  in  Credit  Mobilier  stock,  assuring 
him  it  would  pay  him  good  dividends.  About 
February  ist,  1868,  Mr.  Bingham  purchased  twenty 
shares,  paying  the  par  value  thereof  in  cash.  Mr. 
Ames  received  all  the  dividends,  and  turned  the 
most  over  to  Mr.  Bingham,  retaining  some.  A  final 
settlement  was  made  in  1872,  and  in  that  Mr.  Bing- 
ham received  all  dividends  due  him,  Mr.  Ames 
retaining  the  twenty  shares  of  Credit  Mobilier,  and 
accounting  therefor.  Mr.  Bingham  was  accounted 
the  owner  of  the  stock,  and  received  all  the  divi- 
dends that  were*  declared  upon  it. 

WILLIAM    D.    KELLEY,    OF    PENNSYLVANIA. 

In  the  early  part  of  December,  1867,  Mr.  Ames 
agreed  to  sell  Mr.  Kelley  ten  shares  of  Credit  Mobilier 
stock  at  par  and  interest  from  July  i,  1867.  Mr. 
Kelley  was  not  then  prepared  to  pay  for  the  stock. 


OF    AMERICA.  1 29 

and  Mr.  Ames  agreed  to  carry  it  until  he  could  pay 
for  it.  On  the  3d  of  January,  1868,  there  was  a  divi- 
dend of  eighty  per  cent,  on  Credit  Mobilier  stock  in 
Union  Pacific  bonds.  Mr.  Ames  received  the  bonds, 
as  the  stock  stood  in  his  name,  and  sold  them  for 
ninety-seven  per  cent,  of  their  face.  In  June,  1868, 
there  was  a  cash  dividend  of  sixty  per  cent.,  which 
Mr.  Ames  also  received.  The  proceeds  of  the 
bonds  sold,  and  the  cash  received,  by  Mr.  Ames, 
amounted  to  $1,376.  The  par  value  of  the  stock, 
and  the  interest  thereon  from  the  July  previous, 
amounted  to  $1,047  ;  so,  after  paying  for  the  stock, 
there  was  a  balance  of  dividends  due  Mr.  Kelley  of 
$329.  On  the  23d  day  of  June,  1868,  Mr.  Ames 
gave  Mr.  Kelley  a  check  for  that  sum  on  the 
sergeant-at-arms  of  the  House  of  Representatives, 
and  Mr.  Kelley  received  the  money  thereon.  The 
committee  were  of  the  opinion  that  Mr.  Kelley 
understood  that  the  money  he  thus  received  was  a 
balance  of  dividends  due  him  after  paying  for  the 
stock.  In  September,  1868,  Mr.  Kelley  received 
from  Mr.  Ames  $750  in  money,  which  was  under- 
stood between  them  as  an  advance  to  be  paid  out  of 
dividends.  There  is,  however,  an  entire  variance 
in  the  testimony  of  these  two  men  as  to  what  the 
transaction  between  them  was ;  but  the  committee 
were  unanimous  in  finding  the  facts  as  stated  above. 

GEORGE    S.    BOUTWELL,    OF    MASSACHUSETTS 

was  among  those  who  have  been  said  to  be  holders 
of  stock  in  the  Credit  Mobilier ;    but  he  never  had 


130  THE    CREDIT    MOBILIER 

any  stock,  or  any  dividend  thereon  ;  no  money  was 
paid  by  him  for  stock,  or  received  by  him  for  the 
same. 

B.    F.    BOYER,    OF    PHILADELPHIA 

was  a  member  of  the  House  from  1865  to  1869.  In 
his  testimony  he  says  :  "  I  took  the  stock  in  my  own 
name,  and  have  so  held  it  ever  since,  as  the  books 
will  show.  I  held  seventy-five  shares  as  my  own, 
and  twenty-five  shares  for  my  wife,  making  100 
shares  in  all.  I  always  considered  it  a  legitimate 
stock  operation,  and  never  denied  having  made  the 
investment.  It  did  not  interfere  with  my  duties  as  a 
member  of  Congress.  "  "  No  one  connected  with 
the  Credit  Mobilier,  or  the  Union  Pacific  Railroad, 
ever  directly,  or  indirectly,  expressed,  or  in  any 
way  hinted,  that  my  services  as  a  member  of  Con- 
gress were  expected  in  behalf  of  either  corporation 
in  consideration  of  the  stock  I  obtained,  and  cer- 
tainly no  such  services  were  ever  rendered.  "  "  It 
was,  in  my  judgment,  both  honest  and  honorable, 
and  consistent  with  my  position  as  a  member  of 
Congress ;  and,  as  the  investment  turned  out  to  be 
profitable,  my  only  regret  is  that  it  was  no  larger  in 
amount.  " 

JAMES    A.    BAYARD,    OF    DELAWARE 

was  among  those  mentioned  to  whom  stock  was  to 
be  sold.  In  his  letter  to  Mr.  McComb  he  refers  the 
whole  matter  to  his  son  ;  but  finding  out  afterwards 
that  it  might  be  an  arrangement  affecting  his  action 
as  a  senator  he  positively  declined  having  anything 
to  do  with  it. 


OF    AMERICA.  I3I 

JAMES    BROOKS,    OF    NEW    YORK. 

This  case  differs  much  from  any  other  already 
given.  Mr.  Brooks  was  always  a  warm  advocate 
of  the  Pacific  roads,  both  in  Congress  and  in  the 
public  press.  After  the  Credit  Mobilier  was  obtained 
for  the  construction  of  the  Pacific  railroad,  Mr. 
Brooks  made  efforts  in  connection  with  Dr.  Durant 
to  obtain  subscriptions  to  its  stock,  and  also  spoke 
with  Dr.  Durant  about  taking  $15,000  or  $20,000  of 
the  stock  himself;  but  no  arrangement  was  made  by 
which  either  party  would  be  bound.  In  December, 
1867,  after  the  value  of  the  stock  had  gready 
increased,  Mr.  Brooks  demanded  of  the  Credit 
Mobilier  Company  the  transfer  of  200  shares,  which 
he  claimed  he  had  made  arrangements  for.  Some 
difliculty  arose,  but  the  matter  was  finally  compro- 
mised by  Mr.  Brooks  receiving  100  shares  of  the 
Credit  Mobilier  stock,  $5,000  of  Union  Pacific  bonds, 
and  $20,000  of  Union  Pacific  stock.  Mr.  Brooks 
was,  however,  a  government  director  of  the  road, 
and,  as  the  law  provided  that  such  directors  should 
not  be  stockholders  in  the  road,  he  could  not  hold 
this  stock,  but  had  it  transferred  to  his  son-in-law, 
Charles  H.  Neilson.  The  whole  negotiation  was 
conducted  by  Mr.  Brooks,  and  Neilson  had  nothing 
to  do  with  it  except  to  receive  the  transfer.  The 
$10,000  to  pay  for  the  hundred  shares  was  paid  by 
Mr.  Brooks,  and  he  received  the  $5 ,000  which  came 
with  the  stock.  The  dividends  were  received  by 
Neilson,  but  immediately  turned  over  to  Mr.  Brooks. 
It  was  claimed  that  the  $10,000  was  a  loan  to  Mr. 


132  THE   CREDIT    MOBILIER 

Neilson,  but  there  was  not  the  slightest  evidence  to 
sustain  this  point.  When  the  stock  of  the  Credit 
Mobilier,  several  months  before  this,  had  been 
increased  fifty  per  cent.,  this  was  allotted  to  such 
of  the  stockholders  as  desired  it  -pro  rata,  upon  the 
payment  of  the  par  value  thereof.  Mr.  Brooks 
claimed  that,  under  the  arrangement  by  which  his 
stock  came  to  him,  that  he  or  Neilson  was  entitled 
to  an  additional  fifty  shares  of  the  Credit  Mobilier 
stock.  Finally,  upon  the  principal  stockholders 
signing-  an  agreement  to  that  effect,  the  fifty  shares 
were  transferred  to  him,  and  afterwards  transferred 
to  Neilson.  Mr.  Brooks  was  not  only  a  member  of 
Congress,  but  was  a  government  director  of  the 
Union  Pacific  Railroad  Company.  As  such  it  was 
his  duty  to  watch  over  the  interests  of  the  govern- 
ment in  the  road  and  see  that  they  were  protected 
and  preserved.  The  committee  found  that  he  had, 
through  his  official  position,  procured  the  stock  of 
the  Credit  Mobilier,  and  bonds  and  stock  of  the 
Railroad,  which  he  had  no  moral  or  legal  right  to 
obtain.  And  upon  this  finding  they  submitted  a 
resolution  for  his  expulsion  from  the  House. 

WILLIAM    B.    ALLISON,    OF     IOWA. 

The  committee  in  their  report  make  no  allusion 
to  Mr.  Allison,  but  in  the  testimony  it  appeared  that 
he  had  several  conversations  with  Mr.  Ames,  con- 
cerning Credit  Mobilier  stock,  and  finally  received 
ten  shares,  on  which  no  money  was  paid  down.  He 
received  from  Mr.  Ames  a  memorandum,  showing 


OF    AMERICA.  133 

that  the  dividends  had  nearly  paid  the  par  value  of 
the  stock.  In  June,  1868,  he  received  a  dividend  of 
$600,  being  by  check  on  sergeant-at-arms.  Mr. 
Allison  at  first  stated  that  he  had  returned  the  stock 
and  the  dividends  immediately  upon  their  receipt  by 
him,  but  he  afterwards  testfied  that  it  was  some  time 
later.  It  appeared  only  on  the  cross  examination  of 
Mr.  Ames  that  the  stock  had  been  returned  after  the 
investigation  began,  and  was  with  the  understanding 
that  as  soon  as  the  matter  had  blown  over,  Mr.  Ames 
was  again  to  give  him  the  stock,  the  consideration 
for  the  surrender  to  Mr.  Ames  being  only  nominal. 
The  check  had  been  cashed  by  Mr.  Allison.  Owing 
to  his  popularity  and  the  influence  of  his  friends  the 
committee  were  prevailed  upon  to  pass  Mr.  Allison 
by  without  mention. 

JAMES    A.    GARFIELD,     OF     OHIO. 

The  Committee  say  :  — 

The  facts  in  regard  to  Mr.  Garfield,  as  found  by  the 
committee,  are  identical  with  the  case  of  Mr.  Kelley,  to  the 
point  of  reception  of  the  check  for  $329.  He  agreed  with 
Mr.  Ames  to  take  ten  shares  of  Credit  Mobilier  stock,  but 
did  not  pay  for  the  same.  Mr.  Ames  received  the  80  per 
cent,  dividend  in  bonds,  and  sold  them  for  97  per  cent., 
and  also  received  the  60  per  cent,  cash  dividend,  which 
together  paid  the  price  of  the  stock  and  interest,  and  left 
a  balance  of  $329.  This  sum  was  paid  over  to  Mr.  Gar- 
field by  a  check  on  the  sergeant-at-arms,  and  Mr.  Garfield 
then  understood  this  sum  was  the  balance  of  dividends 
after  paying  for  the  stock.  Mr.  Ames  received  all  the 
subsequent  dividends,  and  the  committee  do  not  find  that. 


I34  THE    CREDIT    MOBILIER 

since  the  payment  of  the  $329,  there  has  been  any  com- 
munication between  Mr.  Ames  and  Mr.  Garfield  on  the 
subject,  until  this  investigation  began.  Some  correspond- 
ence between  Mr.  Garfield  and  Mr.  Ames,  and  some 
conversations  between  them  during  this  investigation,  will 
be  found  in  the  reported  testimony. 

The  following  is  the  statement  of  Gen.  Garfield 
(Jan.  14,  1873)  : 

The  first  time  I  ever  heard  of  the  Credit  Mobilier  was 
some  time  in  1866  or  1S67  —  I  cannot  fix  the  date — when 
George  Francis  Train  called  on  me  and  said  he  was  organ- 
izing a  company  to  be  known  as  the  Credit  Mobilier  of 
America,  to  be  founded  on  the  model  of  the  Credit  Mobil- 
ier of  France  ;  that  the  object  of  the  company  was  to  pur- 
chase lands  and  build  houses  along  the  line  of  the  Pacific 
Railroad  at  points  where  cities  and  villages  were  likely  to 
spring  up  ;  that  he  had  no  doubt  money  thus  invested  would 
double  or  treble  itself  each  year  ;  that  subscriptions  were 
limited  to  $1,000  each,  and  he  wished  me  to  subscribe. 
He  showed  me  a  long  list  of  subscribers,  among  them  Mr. 
Oakes  Ames,  to  whom  he  referred  me  for  further  informa- 
tion concerning  the  enterprise.  I  answered  that  I  had  not 
the  money  to  spare,  and  if  I  had  I  would  not  subscribe 
without  knowing  more  about  the  proposed  organization. 
Mr.  Train  left  me,  saying  he  would  hold  a  place  open  for 
me,  and  hoped  I  would  yet  conclude  to  subscribe.  The 
same  day  I  asked  Mr.  Ames  what  he  thought  of  the  enter- 
prise. He  expressed  the  opinion  that  the  investment 
would  be  safe  and  profitable. 

I  heard  nothing  further  on  the  subject  for  a  year  or 
more,  and  it  was  almost  forgotten,  when  some  time,  I 
should  say,  during  the  long  session  of  1S6S,  Mr.  Ames 
spoke  of  it  again  ;  said  the  company  had  organized,  was 


OF    AMERICA.  135 

doing  well,  and  he  thought  would  soon  pay  large  dividends. 
He  said  some  of  the  stock  had  been  left,  or  was  to  be  left, 
in  his  hands  to  sell,  and  I  could  take  the  amount  which 
Mr.  Train  had  offered  me,  by  paying  the  $1000  and  the 
accrued  interest.  He  said  if  I  was  not  able  to  pay  for  it 
then  he  would  hold  it  for  me  till  I  could  pay,  or  until 
some  of  the  dividends  were  payable.  I  told  him  I  would 
consider  the  matter;  but  would  not  agree  to  take  any 
stock,  until  I  knew,  from  an  examination  of  the  charter 
and  the  condition  of  the  subscription,  the  extent  to  which 
I  should  become  pecuniarily  liable.  He  said  he  was  not 
sure,  but  thought  a  stockholder  would  be  liable  only  for 
the  par  value  of  his  stock  ;  that  he  had  not  the  stock  and 
papers  with  him,  but  would  have  them  after  a  while. 

From  the  case,  as  presented,  I  probably  should  have 
taken  the  stock  if  I  had  been  satisfied  in  regard  to  tiie 
extent  of  pecuniary  liability.  Thus  the  matter  rested  for 
some  time,  I  think  until  the  following  year.  During  the 
interval  I  understood  there  were  dividends  due  amounting 
to  nearly  three  times  the  par  value  of  the  stock.  But  in 
the  meantime  I  had  heard  that  the  company  was  involved 
in  some  controversy  with  the  Pacific  Railroad,  and  that 
Mr.  Ames'  right  to  sell  the  stock  was  denied.  When  I 
next  saw  Mr.  Ames  I  told  him  I  had  concluded  not  to 
take  the  stock.  There  the  matter  ended,  so  far  as  I  was 
concerned,  and  I  had  no  further  knowledge  of  the  com- 
pany's operations  until  the  matter  began  to  be  discussed 
in  the  newspapers  last  fall.  Nothing  was  ever  said  to  me 
by  Mr.  Train,  or  Mr.  Ames,  to  indicate  or  imply  that  the 
Credit  Mobilier  was,  or  could  be,  in  any  way  connected 
with  the  legislation  of  Congress  for  the  Pacific  Railroad, 
or  for  any  other  purpose.  Mr.  Ames  never  gave,  nor 
offered  to  give,  any  stock,  or  other  valuable  thing,  as  a  gift. 
I  once  asked  and  obtained  from  him,  and  afterwards  repaid 


I36  THE    CREDIT    MOBILIER 

to  him,  a  loan  of  $300  ;    that  amount  is  the  only  valuable 
thing  I  ever  received  from,  or  delivered  to  him. 

I  never  owned,  received,  or  agreed  to  receive,  any 
stock  of  the  Credit  Mobilier,  or  of  the  Union  Pacific  Rail- 
road, nor  any  dividends  or  profits  arising  from  either  of 
them. 

As  the  conversations  and  correspondence  men- 
tioned by  the  committee  in  their  report  are  important 
to  show  the  relation  of  the  parties  to  the  transac- 
tion, the  testimony  of  Mr.  Ames  is  here  given  in  full. 

By  the  Chai  rman  :  — 

J^.  In  regard  to  Mr.  Garfield,  state  to  the  committee 
the  details  of  the  transactions  between  you  and  him  in 
reference  to  the  Credit  Mobilier  stock. 

A.  I  -got  for  Mr.  Garfield  ten  shares  of  the  Credit 
Mobilier  stock,  for  which  he  paid  par  and  interest. 

J^.     When  did  you  agree  with  him  for  that? 

A.  That  agreement  was  in  December,  1867,  or  Jan- 
uary, 1S68,  about  the  time  I  had  these  conversations  with 
all  of  them.     It  was  all  about  the  same  time. 

^.     State  what  grew  out  of  it. 

A.  Mr.  Garfield  did  not  pay  me  any  money.  I  sold 
the  bonds  belonging  to  his  $1,000  of  stock  at  97,  making 
$776.  In  June  I  received  a  dividend  in  cash  on  his  stock 
of  $600,  which  left  a  balance  due  him  of  $329,  which  I 
paid  him.  That  is  all  the  transaction  between  us.  I  did 
not  deliver  him  any  stock  before  or  since.  That  is  the 
only  transaction,  and  the  only  thing. 

By  Mr.  Merrick:  — 

^.  The  $339  which  you  paid  him  was  the  surplus 
earnings  on  the  stock  above  the  amount  to  be  paid  for  it, 
par  value  ? 


OP'    AiMERICA.  137 

A.  Yes,  sir  ;  he  never  had  either  his  Credit  Mobilier 
stock  or  Union  Pacific  Railroad  stock.  The  only  thing  he 
realized  on  the  transaction  was  the  $329. 

jg.  I  see  by  this  statement  of  the  account  with  General 
Garfield  there  is  a  charge  of  $47  ;  that  is  interest  from 
July  previous,  is  it? 

A.     Yes,  sir. 

J^.  And  the  $776  on  the  credit  side  of  the  account  is 
the  80  per  cent,  bond  dividend  sold  at  97.? 

A.     Yes,  sir. 

J^.  And  the  $600  on  the  credit  side  is  the  money  divi- 
dend ? 

A.     Yes,  sir. 

Jig.  And  after  you  had  received  these  two  sums,  they 
in  the  aggregate  overpaid  the  price  of  the  stock  and  inter- 
est $329,  which  you  paid  him  .'* 

A.     Yes,  sir. 

^.     Did  you  make  a  statement  of  this  to  Mr.  Garfield.? 

A.  I  presume  so  ;  I  think  I  did  with  all  of  them  ;  that 
IS  my  impression. 

J^.  When  you  paid  him  this  $329,  did  you  understand 
it  was  the  balance  of  his  dividend  after  paying  for  the 
stock  ? 

A.  I  suppose  so.  I  do  not  know  what  else  he  could 
suppose. 

Jg.     You  did  not  deliver  the  certificate  of  stock  to  him? 

A.     No,  sir  ;  he  said  nothing  about  that. 

J§.     Why  did  he  not  receive  his  certificate  ? 

A.     I  do  not  know. 

J§.  Do  you  remember  any  conversation  between  you 
and  him  in  the  adjustment  of  these  accounts.? 

A.     I  do  not. 

.§.  You  understood  that  you  were  the  holder  of  his  ten 
shares  .'* 


138  THE    CREDIT    MOBILIER 

A.     Yes,  sir. 

^.     Did  he  so  understand  it? 

A.  I  presume  so.  It  seems  to  have  gone  from  his 
mind,  however. 

^.  Was  this  the  only  dealing  you  had  with  him  in 
reference  to  any  stock? 

A,     I  think  so. 

jg.     Was  it  the  only  transaction  of  any  kind  ? 

A.     The  only  transaction. 

jg.     Has  that  $329  ever  been  paid  to  you? 

A.     I  have  no  recollection  of  it. 

jg.     Have  you  any  belief  that  it  ever  has? 

A.     No,  sir. 

^.     Did  you  ever  loan  General  Garfield  $300? 

A.  Not  to  my  knowledge  ;  except  that  he  calls  this  a 
loan. 

^.     You  do  not  call  it  a  loan  ? 

A.  I  did  not  at  the  time.  I  am  willing  it  should  go  to 
suit  him. 

^.     What  we  want  to  get  at  is  the  exact  truth. 

A.     I  have  told  the  truth  in  my  statement. 

^.  When  you  paid  him  $329,  did  he  understand  that 
he  borrowed  that  money  from  you  ? 

A.     I  do  not  suppose  so. 

jg.     Have  you  any  belief  now  that  he  supposed  so? 

A.  No  ;  only  from  what  he  said  the  other  day.  I  do 
not  dispute  anybody. 

j^.     We  want  your  judgment  of  the  transaction. 

A.  My  judgment  of  the  transaction  is  just  as  I  told 
you.     There  was  but  one  thing  about  it. 

^.  That  amount  has  never  been  repaid  you?  You 
did  not  suppose  that  you  had  any  right  to  it,  or  any 
claim  to  it. 

A.     No,  sir. 


OF    AMERICA.  I39 

^.  You  regarded  that  as  money  belonging  to  him  after 
the  stock  was  paid  for  ? 

A,     Yes,  sir. 

jg.  There  were  dividends  of  Union  Pacific  Railroad 
stock  on  these  ten  shares  ? 

A.     Yes,  sir. 

j^.     Did  General  Garfield  ever  receive  these? 

A.     No,  sir  ;  never  has  received  but  $329. 

^.     And  that  he  received  as  his  own  money? 

A.  I  suppose  so  ;  it  did  not  belong  to  me.  I  should 
not  have  given  it  to  him  if  it  had  not  belonged  to  him. 

jg.  You  did  not  understand  it  to  belong  to  you  as  a 
loan ;  you  never  called  for  it,  and  have  never  received  it 
back? 

A.     No,  sir. 

jg.  Has  there  ever  been  any  conversation  between 
you  and  him  in  reference  to  the  Pacific  stock  he  was  enti- 
tled to? 

A.     No,  sir. 

.^.     Has  he  ever  called  for  it? 

A.     No,  sir. 

J^.     Have  you  ever  offered  it  to  him? 

A.     No,  sir. 

^.  Has  there  ever  been  any  conversation  in  relation 
to  it? 

A,     No,  sir. 

jg.  Has  there  ever  been  anything  said  between  you 
and  him  about  rescinding  the  purchase  of  the  ten  shares 
of  the  Credit  Mobilier  stock?  Has  there  anything  been 
said  to  you  of  its  being  thrown  up,  or  abandoned,  or  sur- 
rendered ? 

A.     No,  sir,  not  until  recently. 

.§.     How  recently  ? 

A.     Since  this  matter  came  up. 


140  THE    CREDIT    MOBILIER 

.§.     Since  this  investigation  commenced  ? 

A.     Yes,  sir. 

^.  Did  you  consider,  at  the  commencement  of  this 
investigation,  that  you  held  these  other  dividends,  which 
you  say  you  did  not  pay  to  him,  in  his  behalf  ?  Did  you 
regard  yourself  as  custodian  of  these  dividends  for  him  ? 

A.  Yes,  sir ;  he  paid  for  his  stock,  and  is  entitled  to 
his  dividends. 

.§.  Will  the  dividends  come  to  him  at  any  time  on  his 
demand  ? 

A.     Yes,  sir,  as  soon  as  this  suit  is  settled. 

Jg.  You  say  that  $329  w^as  paid  to  him  ;  how  was  it 
paid  to  him  ? 

A.  I  presume  by  a  check  on  the  sergeant-at-arms.  I 
find  there  are  some  checks  filed  without  any  letters  or 
initials  indicating  who  they  were  for. 

Jg.  Have  you  had  any  correspondence,  since  this  divi- 
dend was  paid,  with  him,  in  regard  to  this  matter.? 

A.     I  don't  know  what  matter  you  refer  to. 

^.     If  you  had  any  correspondence  I  would  like  to  see  ft. 

A.     I  have  no  copy  of  it. 

^.     Have  you  the  original  ? 

A.  No,  sir.  Mr.  Garfield  showed  me  a  letter  which 
he  said  he  intended  to  inclose  with  some  money  sent  me. 
I  did  not  know  who  the  money  came  from.  He  showed 
me  a  letter  which  he  said  he  intended  to  have  put  in.  I 
indorsed  on  the  back  of  that  letter  my  reply.  I  just  turned 
over  the  letter  and  wrote  what  I  wrote  on  the  back  of  it, 
and  let  him  have  it. 

jg.  Your  answer,  indorsed  on  the  back  of  it,  was  pub- 
lished in  the  newspapers.-^ 

A.     Yes,  sir;  he  published  the  letter,  I  believe. 

Jg.  As  published  did  they  correspond  with  yonr  recol- 
lection of  the  papers  as  written  ? 


OF    AMERICA.  I4I 

A.  Yes,  sir.  I  wrote  it  off  hastily.  He  came  to  my 
room,  and  said  he  had  been  accused  of  all  kinds  of  crimes 
and  misdemeanors.  I  told  him  I  had  made  no  such  state- 
ments as  he  represented.  He  wanted  me  to  say  in  writing 
that  I  had  not.  I  took  his  letter  which  he  said  he  intended 
to  have  inclosed  with  the  money,  and  wrote  on  the  back 
of  it  that  I  had  made  no  such  stiitement. 

J^.  The  published  correspondence  in  the  morning 
papers  of  the  next  day  is  your  recollection  of  what 
occurred  ? 

A.  It  agrees  with  my  recollection,  except  he  says  he 
left  a  letter  for  me  at  tlie  Arlington.  I  never  received  that 
letter.  I  only  saw  the  letter  on  which  I  indorsed  my 
answer. 

J§.     Did  he  inclose  the  money.? 

A.  Some  money  came  to  me  inclosed  in  an  envelope, 
which  he  said  he  had  sent.     I  gave  it  back  to  him. 

^.     How  much  money  was  in  that  envelope.'* 

A.     About  four  hundred  dollars. 

The  following  is  a  copy  of  the  memorandum 
referred  to  by  witness  as  a  statement  of  his  account 
with  Mr.  Garfield  : 

J.  A.  G.  Dr. 

1S68.     To  10  shares  stock  Credit  Mobilier  of  A.  $1000  00 

Interest 47  00 

June  19.     To  cash 329  00 

$1376  00 

Cr. 
1868.     By  dividend  bonds  Union  Pacific  Railroad, 

$1000  at  So  per  cent,  less  3  per  cent.      $776  00 
Tun.  17.     By  dividend  collected  for  your  acc't       600  00 

$1376  00 


142  THE    CREDIT    MOBILIER 

J§.  You  may  state  whether,  in  conversation  with  you, 
Mr.  Garfield  claimed,  as  he  claimed  before  us,  that  the 
only  transaction  between  you  was  borrowing  $300  ? 

A.     No,  sir  ;  he  did  not  claim  that  with  me. 

Jg.  State  how  he  does  claim  it  with  you  ;  what  was 
said.     State  all  that  occurred  in  conversation  between  you. 

A.  I  can  not  remember  half  of  it.  I  have  had  two  or 
three  interviews  with  Mr.  Garfield.  He  wants  to  put  it  on 
the  basis  of  a  loan.  He  states  that,  when  he  came  back 
from  Europe,  being  in  want  of  funds,  he  called  on  me  to 
loan  him  a  sum  of  money.  He  thought  he  had  repaid  it. 
I  do  not  know.     I  cannot  remember. 

jg.  What  did  you  say  to  him  in  reference  to  that  state 
of  the  case.^ 

A.  I  stated  to  him  that  he  never  asked  me  to  lend  him 
any  money  ;  that  I  never  knew  he  wanted  to  borrow  any. 
I  did  not  know  he  was  short.  I  made  a  statement  to  him, 
showing  the  transaction,  and  what  there  was  due  on  it ; 
that,  deducting  the  bond  dividend  and  cash  dividend,  there 
was  $329  due  him,  for  which  I  had  given  him  a  check ; 
that  he  had  never  asked  me  to  loan  him  any  money,  and  I 
never  loaned  him  any. 

^.  After  you  had  made  that  statement,  what  did  he 
state  in  reply  .^ 

A.     He  wanted  to  have  it  go  as  a  loan. 

J^.     Did  he  claim  that  it  was,  in  fact,  a  loan.^* 

A.     No,  sir  ;  I  do  not  think  he  did.     No  ;  he  did  not. 

jg.  Go  on,  then,  and  state  what  was  said  — all  the  dis- 
cussion that  took  place. 

A.  I  cannot  tell  you  all ;  we  had  three  or  four  talks.  I 
cannot  remember  what  was  said. 

^.  How  long  after  that  transaction  did  he  go  to 
Europe  ? 

A.     I  believe  it  was  a  year  or  two. 


OF    AMERICA.  I43 

jg.  Did  you  have  any  conversation  in  reference  to  the 
influence  this  transaction  would  have  upon  the  election 
last  fall? 

A.     Yes  ;  he  said  it  would  be  very  injurious  to  him. 

Jg.     What  else  in  reference  to  that? 

A.  I  am  very  bad  to  repeat  conversation ;  I  cannot 
remember. 

J^.     State  all  you  know  in  reference  to  it. 

A.  I  told  him  he  knew  very  well  that  that  was  a  divi- 
dend. I  made  out  a  statement,  and  showed  it  to  him  at 
the  time.  In  one  conversation  he  admitted  it,  and  said, 
as  near  as  I  can  remember,  that  there  was  $2,400  due  him 
in  stock  and  bonds.  He  made  a  little  memorandum  of 
$1,000  and  $1,400,  and,  as  I  recollect,  said  there  was 
$1,000  of  Union  Pacific  Railroad  stock,  $1,000  of  Credit 
Mobilier  stock,  and  $400  of  stock  or  bonds,  I  do  not  recol- 
lect what. 

.§.     When  was  that  memorandum  made  ? 

A.  It  was  made  in  my  room  ;  I  cannot  remember  the 
date.     It  was  since  this  investigation  commenced. 

^.  Was  it  in  that  conversation  that  he  referred  to  the 
influence  this  matter  would  have  upon  the  election  in  his 
district  ? 

A.  I  do  not  recollect  whether  it  was  in  that  one  or 
some  other.  I  have  had  two  or  three  conversations  with 
him. 

^.  Tell  as  nearly  as  you  can,  precisely  the  remarks  he 
made  in  that  connection. 

A.  It  was  that  it  would  injure  his  reputation  ;  that  it 
was  a  cruel  thing.  He  felt  very  bad,  was  in  great  distress, 
and  hardly  knew  what  he  did  say. 

J§.  Did  he  make  any  request  of  you  to  make  no  state- 
ment in  reference  to  it? 

A.     I  am  not  positive  about  that. 


144  THE    CREDIT    MOBILIER 

^.     What  is  your  best  recollection  in  reference  to  it? 

A.  My  impression  is  that  he  wanted  to  say  as  little 
about  it  as  he  could,  and  to  get  off  as  easily  as  he  could. 
That  was  about  the  conversation  I  had  with  him,  about 
the  long  and  short  of  it. 

jg.  Have  you  the  memorandum  that  Mr.  Garfield 
made? 

A.     I  have  the  figures  he  made. 

$I,OOD 
[Paper  shown  to  committee,  containing  j  ^qq 

figures  as  follows  : — ]  

2,400 

^.     You  say  those  figures  were  made  by  Mr.  Garfield  ? 

A.     Yes,  sir. 

jg.  What  do  these  sums  represent?  How  did  he  put 
them  down? 

A.  $1,000  Union  Pacific  Railroad  stock;  $1,000 
Credit  Mobilier  stock,  and  $400,  which  he  could  not 
remember  whether  it  was  to  be  in  cash,  stock,  or  bonds. 

^.     Is  that  what  he  received,  or  was  entitled  to  ? 

A.     What  he  was  entitled  to. 

J^.     That  was  his  idea  of  what  was  coming  to  him? 

A.     Yes,  sir. 

^.     Was  that  about  what  he  would  have  been  entitled  to  ? 

A.  He  would  have  been  entitled  to  the  $1,000  in 
stock,  and  he  would  have  been  entitled  to  more  than  that. 
The  $400  I  think  he  is  in  error  about.  I  gave  him  $329 ; 
I  do  not  know  whether  the  $400  referred  to  that. 

J§.  Did  he  put  this  down  as  his  recollection  of  the 
statement  you  made  to  him  ? 

A.     I  so  understood  it. 

^.  It  was  in  this  conversation  that  these  figures  were 
made,  that  he  deprecated  the  effect  of  the  matter  upon  his 
election  ? 


OF    AMERICA.  I45 

A.  I  do  not  know  about  his  election  ;  it  was  about  his 
prospects,  his  reputation,  &c. 

jg.  I  iMiderstand  that  in  substance  he  desired  you  to 
say  as  little  as  possible  about  it? 

A.     Yes,  sir  ;  and  that  is  my  desire. 

jg.     Will  you  repeat  just  what  he  did  say. 

A.  I  cannot  remember  tlie  conversation  well  enough 
to  repeat  it. 

jg.     You  can  repeat  the  substance  of  it .'' 

A,     I  have  given  you  the  substance   of  it. 

jg.  How  did  you  happen  to  retain  this  little  stray 
memorandum  ? 

A.  I  do  not  know.  I  found  it  on  my  table  two  or  three 
days  afterward.  I  did  not  pay  any  attention  to  it,  at  the 
time,  until  I  found  there  was  to  be  a  conflict  of  testimony, 
and  I  thought  it  might  be  something  worth  preserving. 

jg.  The  conversation  was  in  your  room,  and  the  figures 
were  made  there  .'* 

A.     Yes,  sir. 

j^.  Do  I  understand  you  that  this  loan  which  Mr.  Gar- 
field claims  to  have  been  made  was  in  reference  to  a  trip 
to  Europe  taken  by  him  a  year  or  two  afterward .'' 

A.  I  do  not  know  when  he  took  his  trip.  I  know  he 
did  not  go  during  that  session  of  Congress.  This  payment 
was  made  to  him  during  that  session  of  i867-'68. 

jg.  Do  you  know  whether  he  went  during  that  recess 
following? 

A.     I  cannot  say.     I  do  not  know. 

jg.  Do  you  know  that  he  did  not  go  to  Europe  for 
nearly  two  years  afterward  ? 

A.  No  ;  I  do  not.  It  is  my  impression  it  was  two 
years  afterward,  but  I  cannot  remember  dates.  People 
ask  me  about 'things  that  occurred  a  year  ago,  and  I  can- 
not tell  whether  it  was  ten  years  ago  or  one. 

K 


146  THE    CREDIT    MOBILIER 

By  the  Chairman  :  — 

jg.  Did  you  understand  in  this  conversation  you  had 
with  General  Garfield,  that  you  detailed  to  him  the  history 
of  this  matter  as  to  how  the  statement  you  had  let  him 
have  was  made  up?  and  did  you  understand  him  to  con- 
cede your  statement  about  it  to  be  the  truth  ? 

A.  Well,  I  cannot  say.  He  would  not  have  been  very 
apt  to  recollect  the  amount  there  was  due  him  if  he  had 
not  acceded  to  my  statement. 

J^.  From  the  whole  conversation  —  from  what  he  said, 
and  the  figures  that  he  made,  did  you  understand  him  to 
concede  the  statement  you  had  made  to  him  as  about  the 
truth  ? 

A.     Yes  ;  I  so  understood  him. 

J§.  That  statement  you  made  to  him  was  in  substance 
the  statement  you  made  to  us  in  reference  to  him? 

A.     Yes,  sir. 

JAMES    W.    PATTERSON    OF    NEW    HAMPSHIRE. 

Mr.  Patterson  purchased  of  Mr.  Ames,  August 
31,  1867,  thirty  shares  of  the  Credit  Mobilier,  paying 
therefor  $3000,  which  stock  he  subsequently  trans- 
ferred to  Morton,  Bliss  &  Co. ,  of  New  York,  and  later 
purchased  $4,000  of  stocks  and  bonds  of  the  Union 
Pacific  Railroad,  which  were  sold  for  Mr.  Patterson 
by  Morton,  Bliss  &  Co.  From  the  Credit  Mobilier 
stock  Mr.  Patterson  received  as  dividends,  February 
14,  1868,  $2,328;  June  23,  1868,  $1,800;  May  6, 
1871,  $757.24  and  100  shares  of  Union  Pacific 
stock,  and  $2,000  income  bonds  of  that  road.  Mr. 
Patterson's  testimony  was  to  the  effect  that  he  gave 
to  Mr.  Ames  $3,000  to  invest  for  him,  and  that  he 


OF    AMERICA.  I47 

was  not  aware,  and  in  fact  never  knew,  that  he  had 
purchased  any  Credit  Mobilier  stock  with  it ;  on 
the  contrary,  his  impression  had  always  been  that 
the  money  had  been  invested  by  Mr.  Ames  in 
Union  Pacific  stock  and  bonds.  But  the  committee 
(from  the  Senate)  say  : 

As  a  matter  of  fact,  the  committee  find  that  the  $3000 
paid  by  Patterson  to  Ames  was  the  purchase  money  of 
thirty  shares  of  Credit  Mobilier  stock  on  the  31st  of 
August,  1867,  positive  testimony  of  Mr.  Ames  to  this 
effect,  the  payment  of  dividends  in  February  following 
upon  that  amount  of  stock,  and  again  in  June,  when  he 
receipts  to  Ames  "  for  $1800  on  account  of  dividends 
received  by  him  as  trustee  on  stock  for  my  account." 

In  May,  1871,  an  adjustment  of  matters  is  had 
between  the  parties,  and  Mr.  Patterson  gives  Mr. 
Ames  a  receipt  for  "$757.24  in  cash,  on  account  of 
the  transaction  thirty  shares  of  stock  in  the  Credit 
Credit  Mobilier  stock,  and  there  are  still  due  in 
Mobilier  of  America,  and  $2,000  in  income  bonds 
of  the  Union  Pacific  Railroad." 

Mr.  Patterson  says,  in  regard  to  these  receipts, 
that  Mr.  Ames  came  to  him  some  months  after  his 
giving  the  money  to  invest,  and  said,  ''  I  have  sold 
your  bonds,"  and  paid  to  him  some  money,  for 
which  he  gives  a  receipt,  without  giving  any  heed 
to  the  character  of  the  receipt,  and  that  the  impres- 
sion on  his  mind  was,  that  Mr.  Ames  had  disposed 
of  securities  in  the  road,  and  nothing  connecting 
with  the  Credit  Mobilier.  The  same  committee, 
however,  say  in  their  report : 


148  THE    CREDIT    MOBILIER 

The  committee  find  in  the  statement  of  Mr.  Patterson 
before  the  committee  of  the  House  of  Representatives,  and 
his  statement  before  this  committee,  a  contradictory  rela- 
tion of  the  transaction  between  him  and  Mr.  Ames ;  a 
suppression  of  material  facts,  and  a  denial  of  other  facts 
which  must  have  been  known  to  him. 

The  committee  then  further  review  this  transaction, 
and  conclude  their  report  as  follows  : 

And  further,  that  being  inquired  of  in  relation  thereto 
before  committees  of  both  branches  of  Congress,  he  gave 
a  false  account  of  the  transactions  between  himself  and 
Mr.  Ames,  suppressed  material  facts,  and  denied  the 
existence  of  other  material  facts  which  must  have  been 
well  known  to  him. 

The  committee  have  reached  a  conclusion,  after  the 
most  attentive  consideration  and  anxious  deliberation, 
which  they  would  fain  wish  were  otherwise,  but  a  sense 
of  duty  compels  them  to  declare. 

They  submit  the  following  resolution  : 

Resolved^  That  James  W.  Patterson  be,  and  he  is 
hereby  expelled  from  his  seat  as  a  member  of  the  Senate. 

No  definite  action  was  taken  on  this  report,  and 
five  days  after,  the  term  of  Mr.  Patterson  expired. 

Mr'  Patterson  subsequently  addressed  the  Senate 
in  a  long  reply,  vindicating  his  actions,  but  which 
we  cannot  insert  here. 

SCHUYLER    COLFAX. 

The  committees  from  the  House  and  from  the  Sen- 
ate, in  their  reports,  make  no  mention  whatever  of 
the  name  of  Mr.  Colfax,  at  that  time  Vice-President 
of  the  United  States.  But  from  the  testimony  that  was 


OF    AMERICA.  I49 

taken  before  the  House  committee  much  of  interest 
may  be  gleaned.  January  7,  1868,  he  made  the 
following  statement  before  the  committee  : 

I  may  add  that  Mr.  Ames  will  recollect,  when  I  call  to 
mind  the  circumstances  of  the  transaction,  that  he  never 
paid  me  a  dollar,  or  the  value  of  a  dollar,  on  any  account 
whatever.  *  ♦  I  repeat  that  I  never  did  receive  a  dol- 
lar, or  the  value  of  a  dollar,  on  any  account  whatever, 
from  him  ;  and  I  think  Mr.  Ames  will  recollect  that  I  did 
not,  when  I  recall  to  his  mind  these  circumstances,  which 
would  of  course  impress  themselves  more  on  my  mind 
than  his,  as  it  was  a  larger   matter  to  me  than  to  him. 

I  state  explicitly  that  no  one  ever  gave,  or  offered  to 
give  me,  any  shares  of  stock  in  the  Credit  Mobilier.  or  the 
Union  Pacific  Railroad  I  have  never  received,  or  had 
tendered  to  me,  any  dividends  in  cash,  stock,  or  bonds, 
accruing  upon  any  stock  in  either  of  said  organizations. 
And  neither  Mr.  Ames,  nor  any  other  person  connected 
with  either  of  said  organizations,  ever  asked  me  to  vote 
for  or  against  any  measures  aflecting  the  interests  of  either, 
directly  or  remotely,  or  to  use  any  personal  or  official 
influence  in  their  favor.  I  desire,  however,  to  state  all 
the  circumstances  through  which,  probably,  my  name 
came  to  be  associated  with  this  organization. 

Five  years  ago,  about  the  time  of  the  holiday  recess,  I 
was  conversing  on  the  floor  of  the  House  with  Mr.  Ames 
in  regard  to  the  Union  Pacific  Railroad,  in  favor  of  the 
buildmg  of  which  I  had  previously  made  hundreds  of 
public  addresses.  In  the  course  of  this  conversation  he 
asked  if  I  would  not  like  to  purchase  some  stock  in  the 
Credit  Mobilier.  Up  to  that  time  I  knew  nothing  of  its 
capital  or  profits ;  and  I  enquired  of  him  as  to  its  objects 
and  the  value  of  its  stock. 


150  THE    CREDIT    MOBILI2R 

As  near  as  I  can  recall  this  conversation,  after  the 
lapse  of  so  many  years,  I  was  informed  by  him  that  it  was 
a  legally  incorporated  company,  composed  of  the  principal 
stockholders  of  the  Union  Pacific  Railroad,  who  were 
themselves  building  the  road,  instead  of  letting  it  out 
to  contractors  who  always  expected  large  profits  for 
their  risks  and  for  their  advances  of  moneys  for  sup- 
plies. I  told  him,  after  his  explanation,  that  it  looked 
like  a  good  and  safe  investment  for  one  of  limited  means, 
and  that  I  would  be  willing  to  purchase  twenty  or  thirty 
shares  at  a  fair  price  if  I  had  the  money.  But  I  added 
frankly  that  I  could  not  pay  for  them  till  two  or  three 
months  afterward,  as  my  housekeeping  expenses  in  the 
opening  months  of  the  session  were  much  larger  than  the 
average.  He  said  he  would  contract  to  sell  me  twenty 
shares  at  par,  if  I  would,  in  addition,  agree  to  pay  interest 
until  final  payment.  I  enquired  what  per  cent,  it  would 
pay,  and  he  replied  that  there  had  been  large  dividends, 
but  as  the  road  was  pushed  further  into  the  interior  the 
profits  might  not  be  large,  though  they  would  be  very 
surely  remunerative. 

The  Union  Pacific  Railroad  had  no  legislation,  that  I 
knew  of,  pending  before  Congress  at  the  time,  nor  did  I 
suppose  there  could  be  any  in  the  future,  as  the  last 
amendment  to  their  charter,  authorizing  the  issue  of 
first-mortgage  bonds,  which  should  have  priority  of  the 
government  lien,  had  been  enacted  in  1864,  over  three 
years  before  this  conversation.  Inferring  tiiat  any  ques- 
tions arising  under  this  charter  would  be  judicially  settled, 
and  supposing,  at  any  rate,  that  I  had  the  same  right  to 
purchase  this  stock  as  to  buy  stock  in  a  national  bank 
chartered  by  Congress,  or  in  a  manufactory,  I  told  him 
I  would  agree  to  purchase  twenty  shares  at  par,  and  inter- 
est, to  be  paid  for  as  soon  as  I  had  the   money.     Some 


OF    AMERICA. 


151 


weeks,  or  months,  afterward,  at  the  same  session,  I  paid 
Mr.  Ames  about  $500  in  cash  on  this  contract  of  purchase, 
being  all  the  money  I  had ;  but  received  no  dividend  or 
certificate,  in  whole  or  in  part.  My  impression  is  that 
he  told  me  that  one  or  two  dividends  had  been  earned, 
but  they  were  not  in  cash,  and  were  as  yet  unadjusted. 
Certiiinly  I  did  not  receive  any,  and  Was  not  offered  any 
in  cash,  bonds,  or  stock,  then  or  since.  A  few  weeks,  or 
months,  after  this,  I  heard  a  rumor  that  unpleasant  contro- 
versies existed  among  the  largest  stockholders,  which 
were  certain  to  involve  the  organization  in  prolonged 
litigation. 

The  very  day  I  heard  this  rumor  I  told  Mr.  Ames 
that  no  profits,  present  or  prospective,  could  induce  me  to 
buy  into  a  lawsuit ;  that  I  had  never  been,  during  all  my 
life,  a  plaintiff  or  a  defendant  in  a  court  of  justice  ;  and 
that  I  must,  therefore,  recede  entirely  from  the  transaction 
between  us,  as  I  did  not  want  stock  of  any  kind,  on  any 
terms,  that  would  make  me  a  party  to  litigation.  He 
assented  to  this,  and  nothing  was  said  as  to  the  money 
paid,  my  anxiety  being  not  to  get  into  a  lawsuit.  All 
these  things  occurred  at  the  same  session  of  Congress,  five 
years  ago,  which  closed  in  the  summer  of  1868.  The 
next  year,  or  the  year  after,  Mr.  Ames  suspended  pay- 
ment, in  consequence,  as  was  said,  of  financial  involve- 
ments connected  with  the  Pacific  Railroad,  and  his 
creditors  gave  l)im  an  extension  on  his  liabilities.  But, 
regretting  his  failure  and  its  cause,  1  voluntarily  told  him 
to  dismiss  from  his  mind  the  small  amount  of  money 
between  us.  I  suppose,  but  for  this,  he  would  have 
repaid  me  the  money  I  paid  him.  I  may  repeat,  there- 
fore, that  neither  stock  nor  bonds  were  given  to  me,  nor 
offered  to  be  given  to  me  ;  that  I  have  never  received  a 
dollar  in  bonds,  stock,  or  money,  as  dividends  ;   that  I  did 


152  THE    CREDIT    MOBILIER 

contract  to  purchase  twenty  shares  of  stock  n  the  com- 
pany at  par  and  interest,  but  that,  after  a  partial  payment, 
I  withdrew  entirely  from  what  I  regarded  as  an  uncom- 
pleted contract  to  purchase,  from  repugnance  to  being 
involved  in  litigation  ;  and  that,  instead  of  being  enriched 
by  it  one  thousand  or  twenty  thousand  dollars,  as  has 
been  charged,  I  am  voluntarily  out  of  pocket  five  hundred 
dollars,  and  have  been  for  nearly  five  years. 

The  testimony  of  Mr.  Ames  is  that  he  secured  for 
Mr.  Colfax  twenty  shares  of  Credit  Mobilier  stock, 
which  he  "  was  to  hold  until  paid  for ;  that  he 
received  a  dividend  on  them  of  eighty  per  cent,  in 
bonds,  which  bonds  he  sold  and  accounted  for  to  Mr. 
Colfax ;  which  left  a  balance  due  on  the  stock  of 
$534.72,  which  Mr.  Colfax  paid  him  with  a  check; 
the  date  of  the  check  was  March  5,  1868.  " 

The  following  are  the  questions  by  Judge  Polland, 
the  chairman,  with  Mr.  Ames'  answers  : 

Jg.     Were  there  any  dividends  on  that  stock  afterward.'* 

A.  There  was  one  dividend.  There  were  other  divi- 
dends in  stock  which  I  never  delivered  to  him.  There 
was  a  dividend  in  cash,  in  June,  which  I  did  pay  to 
him. 

jg.     How  large  was  that? 

A.     Twelve  hundred  dollars. 

Jg.     Have  you  any  receipt  or  voucher  tor  that? 

A.  No,  sir;  I  gave  him  a  check  on  the  sergeant-at- 
arms,  and  it  is  charged  to  me  there. 

^.  And  you  got  this  date  from  the  sergeant-at-arms* 
book  ? 

A.  Yes ;  I  never  delivered  to  Mr.  Colfax  anything 
else,  and  never   received  anytliing  from  him  except   that 


OF    AMERICA.  I53 

time.     He  paid  me  for   the   balance  of  the   stock,  and  I 
paid  him  a  cash  dividend. 

*****♦♦♦♦*♦ 

^.  At  the  time  you  paid  him  $1,200,  or  gave  him  a 
check  upon  the  sergeant-at-arms  for  that  amount,  did  Mr. 
Colfax  understand  that  this  was  a  dividend  on  this  Credit 
Mohilier  stock? 

A.  I  suppose  so  ;  i  do  not  know;  I  so  understood  it. 
That  is  what  it  was  ;  whether  he  understood  the  matter  is 
more  than  I  know ;  I  do  not  know  that  I  gave  liim  any 
explanation.     I  gave  him  the  check. 

jg.  Plave  you  any  doubt  that  you  told  him  what  it 
was? 

A.  I  cannot  remember.  When  I  suppose  a  man 
knows  a  thing  I  don't  tell  him  over  again. 

^.  Do  you  remember  whether  he  made  any  inquiry 
as  to  what  it  was? 

A.  I  don't  remember  anything  about  what  was  said  at 
all. 

^.  You  supposed  that  it  was  understood  that  it  was  a 
dividend  you  had  received  upon  that  stock? 

A.     I  supposed  so. 

^.     Has  he  ever  repaid  you  that  $1,200? 

A.  Not  to  my  knowledge.  It  did  not  belong  to 
me. 

^.  You  never  made  any  claim  upon  him  for  it,  and 
did  not  suppose  you  had  any  right  to  it. 

A.     No,  sir. 

J^.  These  $534  that  were  paid  you,  you  did  not  sup- 
pose he  had  any  right  to  call  upon  you  to  pay  back? 

A.  I  did  not  suppose  so  ;  I  understood  that  I  sold  him 
$2,000  worth  of  stock.  The  first  dividend,  80  per  cent, 
in  bonds,  and  that  check  for  $534,  paid  for  the  stock. 
That  was  my  supposition. 


154  '^^^    CREDIT    MOBILIER 

By  Mr.  Merrick:  — 

jg.  In  what  order  of  time  were  the  two  dividends  paid, 
of  $1 ,200  and  $500  ? 

A.  He  paid  me  $500  in  March,  and  I  paid  him  $1,200 
in  the  June  following. 

jg.  Were  there  any  other  different  transactions  betweeti 
you  and  Mr.  Colfax  to  which  these  payments  could  refer 
at  all,  except  this  Credit  Mobilier.? 

A.     No,  sir. 

jg.  What  memoranda  or  entries  have  you  in  reference 
to  this  transaction  ? 

A.  I  made  a  little  memorandum  at  the  time,  I  suppose, 
which  I  handed  him  ;  when,  I  don't  remember. 

J^.     Have  you  any  memorandum  with  you  ? 

A.     No.  sir. 

J^.     Have  you  made  a  memorandum  of  it  at  all  ? 

A.  Yes  ;  1  took  a  copy  of  the  memorandum  I  made, 
and  brought  it  with  me.  When  I  went  home,  you  asked 
me  to  look  over  my  books.  I  did,  and  found  I  had 
received  $534  from  Mr.  Colfax,  and  I  found  I  had  charged 
him  with  $1,200  in  June. 

jg.     Have  you  the  memorandum  made  at  the  time? 

A.  No,  sir;  not  here ;  I  have  a  memorandum  which 
I  took  from  that. 

3.  What  was  the  character  of  the  book  in  which  the 
memorandum  was  made  ? 

A.  It  was  a  small  pocket  memorandum,  and  some  of 
it  on  slips  of  paper. 

jg.     It  was  entered  in  journal  form  ? 

A.  No;  it  was  simply  a  small  memorandum  book. 
These  things  were  closed  up  at  the  time  here,  and  they 
were  not  entered  on  my  books  at  home. 

3.  Is  what  you  have  here  a  copy  of  your  memorandum 
made  at  the  time  ? 


OF   AMERICA.  1 55 

A.  Yes,  sir;  that  contains  the  names  I  took  from  my 
books. 

^.  The  only  entry  in  this  in  reference  to  Mr.  Colfax  is 
the  $534.   The  $1,200  was  not  put  on  this  memorandum.'^ 

A.     No,  sir. 

By  the  Chairman  :  — 

^.  Both  these  entries  were  made  in  this  book,  the 
$500  to  pay  the  balance  of  the  stock,  and  the  $1,200 
which  were  paid  in  June  by  a  check  on  the  sergeant-at- 
arms? 

A.  Yes  ;  they  were  both  on  that  book.  I  have  looked 
it  over  to  see,  and  I  have  looked  over  the  sergeant-at- 
arms'  book  to  see  if  my  entries  were  correct,  and  I  find 
they  are. 

By  Mr.  McCrary  :  — 

^.  Did  Mr.  Colfax  tell  you  at  any  time  that  he  had 
concluded  not  to  take  the  stock  .^^ 

A.  I  have  no  recollection  of  it,  unless  it  was  in  that 
conversation  to  which  he  has  referred.  I  have  no  recol- 
lection of  it. 

jg.  Have  you  any  recollection  of  informing  him  of  the 
litigation  that  had  sprung  up  in  regard  to  it? 

A.     I  think  I  did  ;  I  think  I  told  them  all. 

jg.  You  do  not  remember  what  he  said  when  you 
informed  him  of  that? 

A.     No,  sir. 

^.  Did  you  not  understand  that  this  sale  of  stock  to 
Mr.  Colfax  was  rescinded ;  that  the  trade  was  given  up, 
and  that  he  relinquished  the  stock  to  you? 

A.  Not  unless  he  meant  to  be  understood  so  in  the 
conversation  when  I  came  back.  I  did  not  consider  it 
given  up.  I  did  not  consider  that  I  had  any  right  to  with- 
hold it. 


156  THE    CREDIT    MOBILIER 

^.  Was  there  any  thing  of  the  kind  said  between 
you  ? 

A.  I  cannot  recollect ;  it  might  have  been  said  ;  but  1 
cannot  recollect  it. 

Jg.     Have  you  ever  been  reimbursed  for  that  $1 ,200  ? 

A.     No,  sir. 

At  this  point  in  Mr.  Ames' testimony,  Mr.  Colfax, 
with  the  permission  of  the  committee,  began  to  in- 
terrogate the  witness.  Many  of  the  questions  of 
little  bearing  are  here  omitted ;  but  what  are  pre- 
sented include  all  that  are  of  importance. 

^.  Now,  when  I  testified  on  the  7th  of  January,  and 
asked  you  to  cross-examine  me,  if  the  statement  I  made 
was  not  correct,  why  did  you  not  contradict  me  then? 

A.  I  had  not  examined  the  records  then;  I  had  not 
refreshed  my  recollection. 

^.  The  subject  had  been  discussed  all  over  the 
country,  and  your  attention  must  have  been  called  to  it. 

A .  My  minutes  were  at  home,  and  I  had  not  examined 
them  until  I  went  back  home. 

jg.  You  say  you  paid  me  $1,200  by  a  check  on  the 
sergeant-at-arms  ? 

A.     I  did. 

j^.     Where  was  I  when  you  paid  me  ? 

A.  I  do  not  know  ;  I  cannot  say.  The  check  is  in  the 
sergeant-at-arms'  room. 

jg.  Now,  when  I  asserted,  in  my  testimony,  that  I  had 
never  received  a  dollar  from  you,  why  did  you  not  contra- 
dict me  then,  and  say  to  the  committee  that  you  had  paid 
me  a  check  of  $1,200.? 

A.  I  was  not  in  a  position  to  contradict  you,  because 
I  had  not  examined  my  minutes,  and  refreshed  my  recol- 
lection. 


OF    AMERICA.  1 57 

.ig.  Did  I  not  tell  you  the  first  of  the  present  session  that 
I  wanted  you  to  tell  the  whole  truth  about  the  matter? 

A.     Well,  I  think  I  have  done  so. 

^.  Why  not  have  done  so  at  first?  Why  didn't  you 
tell  it  when  I  was  here  and  gave  my  testimony?  Why 
didn't  you  state  that  you  had  paid  me  $1,200? 

A.     I  did  not  want  to  dispute  you. 

.Ig.  You  say  that  was  the  only  cash  dividend  in  1868 
upon  this  stock? 

A.     I  think  the  only  cash  dividend. 

j^.  In  Mr.  Durant's  testimony  there  is  a  statement 
that  there  was  a  cash  dividend  of  30  per  cent,  in  July, 
1868? 

A.     I  think  not. 

jg.  Mr.  Durant  also  states  that  there  was  a  bond  divi- 
dend during  that  session.  What  did  you  do  with  the 
bonds  belonging  to  me? 

A.     There  are  bonds  belonging  to  you  now. 

jg.     You  did  not  sell  all  the  bonds  then  ? 

A.  No ;  there  are  bonds  that  belong  to  you  now, 
bonds  that  belong  to  your  stock,  and  that  you  are 
entitled  to. 

jg.     Where  is  what  I  am  entitled  to  now  ? 

A.     I  hold  it. 

J§.     Have  you  ever  offered  it  to  me  ? 

A.     No,  sir  ;  I  am  waiting  for  the  result  of  this  suit. 

J^.     Have  you  ever  told  me  any  thing  about  it? 

A.  I  suppose  I  told  you  about  it  in  1868,  when  I  told 
several  others. 

^.     You  do  not  think  you  told  me,  do  you  ? 

A.  I  do  not  know  whether  I  did  ;  I  suppose  I  gave 
you  a  statement. 

^.  Now,  in  regard  to  this  thing  being  off,  you  say  you 
got  tliat  from  my  testimony? 


^58  THE    CREDIT    MOBILIER 

A.  It  must  have  been  from  a  conversation  with  you 
since  we  have  been  here  this  present  session.  I  called 
upon  you  at  your  room. 

^.  Did  you  have  any  other  checks  on  the  sergeant-at- 
arms  at  the  same  time  that  you  gave  me  this  one  for 
$1,200? 

A.     Yes,  sir. 

jg.  You  do  not  remember  when  you  paid  me  this 
$1,200  check? 

A.  I  suppose  it  was  in  the  House.  The  sergeant-at- 
arms  paid  it. 

^.     Was  it  paid  to  my  order? 

A.     It  was  payable  to  "  S.  C.  or  bearer.  " 

jg.     Paid  to  me  by  the  sergeant-at-arms  ? 

A.  I  think  so.  It  is  in  his  possession  as  a  voucher  for 
the  money,  and  my  books  show  that  I  gave  you  the  check 
at  the  time  for  $1,200. 

J^.  Is  it  not  more  probable  that  you  got  the  money  on 
that  check  yourself,  as  we  had  this  talk  about  being  off  ? 

A.  That  check  was  given  a  long  while  before  I  had  any 
talk  about  being  off.     This  check  was  given  in  June,  186S. 

^.  My  recollection  is  that  the  talk  we  had  about  being 
off  was  in  the  summer  of  1868,  at  the  same  session  at 
which  you  say  the  check  was  given. 

A.     There  had  been  no  litigation  then. 

J§.  Was  it  not  in  regard  to  prospective  litigation  that 
we  were  talking? 

A.  No  ;  I  did  not  know  anything  about  any  litigation 
or  suit  until  after  June. 

j^.  You  are  positive  that  you  paid  me  this  check  for 
$1,200? 

A.     I  am  positive  I  gave  you  the  check. 

J^.  And  then  I  ask  you  again,  why  did  you  not  say  so 
when  you  testified  in  December? 


OF    AMERICA. 


159 


A.     I  testified  that  I  had  paid  you  the  dividends. 

^.  You  stated  in  your  first  examination  that  you 
could  not  remember  having  paid  me  any  dividends. 
Then,  in  your  cross-examination,  you  said  that  possibly 
you  might  have  paid  me,  but  you  were  not  certain. 

A.     Yes;  now  I  am  certain. 

^.  Then  this  transaction  had  passed  out  of  your  mind, 
so  that  you  were  not  certain  then  ? 

A.  I  could  not  remember  the  amount  at  all  until  I  had 
examined  my  books.  I  examined  my  books  when  I  went 
home,  and  when  I  returned  to  Washington  I  compared  my 
memorandums  with  the  checks  the  sergeant-at-arms  has 
on  file,  and  I  found  my  check  filled  out  "  S.  C.  *',  which 
corresponded  with  the  memorandum  I  had  on  my  book. 

Mr.  Colfax  again  said  : 

I  want  again  to  state  to  the  committee,  as  I  before 
stated,  that  I  do  not  remember  ever  having  received  one 
dollar  from  Mr.  Ames,  and  I  hope  to  be  able  to  prove 
that  fact.  I  think  there  is  a  mistake  in  the  statement  Mr. 
Ames  makes. 

The  following  is  the  memorandum  from  which 
Mr.  Ames  testified  in  relation  to  Mr.  Colfax  : 

S.  C.  Dr.  Cr.. 

1868.  1868. 

To  20  shares  stock  March  5.  By  cash     $534  73 

C.  M.  of  A.    .    $2,000  00  Feb.  14.  Dividends 
To  interest  ...  86  72       of  bonds  U.  P. 

June  19.  To  cash     1,20000       R.  R.,   $2,000 

80 ;  $1,600,  less 
3  per  cent    .    .     1^552  00 
June  17.   By   divi- 
dend    collected 
for  his   account    1,200  00 

$3,286  72  $3,286  72 


l6o  THE    CREDIT    MOBILIER 

The  following  day  considerable  testimony  was 
given,  both  by  Mr.  Ames  and  Mr.  Colfax,  each 
maintaining  strongly  the  positions  taken  above,  Mr. 
Ames  asserting  positively  that  he  paid  Mr.  Colfax 
the  $1,200,  and  accounted  to  him  for  the  other 
dividends,  and  producing  the  check  of  $1,200.  Mr. 
Colfax  as  positively  denied  its  receipt,  but  said  that 
he  understood  that  the  $534.72  which  he  paid  Mr. 
Ames  was  to  pay  in  full  for  the  stock  in  connection 
with  the  unadjusted  dividends  of  which  Mr.  Ames 
made  mention. 

Mr.  Colfax  also  made  the  following  statement : 

I  wish  to  repeat  exactly  what  I  stated  day  before  yester- 
day ;  that  I  never  received  from  Mr.  Ames  a  dollar  on 
any  account  whatsoever.  I  never  saw  this  check.  I  never 
knew,  until  I  saw  this  check  this  morning,  whether  Mr. 
Ames  signed  his  name  O.  Ames  or  Oakes  Ames.  Why, 
if  the  check  was  for  me,  he  should  have  filled  it  out  with 
"  S.  C.  or  bearer,"  I  cannot  imagine.  If  I  had  seen  a  check 
so  filled  out,  it  would  have  struck  me  very  forcibly.  Now 
I  could  not  have  had  $i,300  added  to  my  income  without 
remembering  it  very  positively.  I  could  not  have  talked 
with  Mr.  Ames  afterwards  about  sympathizing  with  him 
in  his  misfortunes,  and  proposed  to  remit  to  him  the  $500 
I  had  paid  him,  if  I  had  received  $i,300  from  him. 

The  sergeant-at-arms  and  assistants  testified  that 
the  various  checks  were  paid,  some  with  only  ini- 
tials, and  some  with  whole  names ;  that  a  check 
payable  to  initials  or  bearer  would  be  paid  without 
endorsement ;  but  they  could  not  tell  to  whom  it  was 
paid. 


OF    AMERICA.  l6l 

January  28,  1868,  the  cashier  of  the  First  National 
Bank  of  Washington,  where  Mr.  Colfax  had  his 
account,  was  called,  and  testified  as  follows  : 

By  the  Chairman  — 

jg.  Will  you  state,  from  the  ledger  which  is  open 
before  you,  whether  it  appears  that  Mr.  Colfax  made  a 
deposit  on  the  22d  of  June,  1868? 

A.     It  does. 

jg.     What  is  the  amount? 

A,     By  reference  to  the  books  I  find  it  was  $1,968.63. 

jg.  From  that  entry  you  understand  that  amount  of 
money  was  deposited  to  his  credit  either  by  him  or  by 
somebody  for  him  ? 

A.     Yes,  sir. 

jg.  State  the  various  deposits  made  to  his  credit  from 
that  time  during  the  month  of  July? 

A.    July  7,  $400;  Julys,  $150;  July  13,  $1,543.87. 

By  Mr.  Ames  : 

^.  Can  you  state  whether  the  deposit  of  the  2 2d 
June  was  in  money  or  in  checks? 

A.  It  is  entered  as  ''  cash  items.  "  It  may  have  been 
money  ;  it  may  have  been  checks. 

By  the  Chairman  : 

jg.  Have  you  the  deposit  check  with  you?  If  so,  you 
will  please  read  it. 

A.  It  reads:  ''Deposited  in  the  First  National  Bank 
by  Schuyler  Colfax,  June  22,  1868. 

United  States  and  bank  notes  ....    $1,200  00 

Checks  as  follows 250  00 

1863 
500  00 

$1,968  63  " 


l62  THE    CREDIT    MOBILIER 

.§.     You  will  look  at  your  ledger  and  see  when  the  last 
deposit  of  Mr.  Colfax  was  made  prior  to  the  22d  June. 
A.     That  was  June  ist. 

On  the  6th  of  February  Mr.  Ames,  at  the  request 
of  the  committee,  produced  his  memorandum  book, 
which  is  now  so  famous.  The  book  was  a  small 
one,  which  Mr.  Ames  carried  in  his  pocket,  and 
used  for  the  purpose  of  making  private  memoranda. 
When  called  upon  by  the  committee  to  produce  it, 
he  did  so,  but  desired  that  it  should  be  exhibited 
only  as  to  those  matters  before  the  committee.  We 
shall  not  attempt  to  put  in  the  different  questions 
and  answers  relating  to  it,  but  shall  give  copies  of 
the  memoranda  and  explanation  sufficient  to  make 
them  clearly  understood. 

The  first  entry  exhibited  was  that  of  Mr.  Wilson, 
as  follows  :  — 

1868. 

Tuesday,  January  14. 

Henry  Wilson,  cr.  for  cash  on  act.  of  C.  M. 

of  A 70  00 

1868.     Monday,  February  10. 
For  $1,600  bonds. 

Paid  H.   Wilson 54^  00 

In  Scofield  check ^95  33 

U.  P.  R.  R.  check 308  72 

Sergt.-at-Arms 44  00 

548  05 
Mr.   Ames  stated   that  there  were   several  other 
business  matters  relating  to   Mr.  Wilson  upon  the 


OF   AMERICA.  163 

book  which  in  no  way  related  to  the  Credit  Mobilier. 
This  memorandum  relates  to  the  dividend  of  $1,600 
in  bonds  on  the  20  shares  of  Credit  Mobilier  which 
Mr.  Wilson  held. 

The  next  entry  relating  to  Mr.  Wilson  is  as  fol- 
lows :  — 

1868.  Monday,  June  22,  i868. 

Hon.  Henry  Wilson. 

By  div.  from  U.  P.  R.  R.  .    .    .    / $1,200 

Cash      223  00 

I  C.  R.  &  M.  R.  bd 950  00 

Int*st  from  Feb.   i  .....    .      27  00  1,200 

Bond  to  be  ded. 
Check  on  Bk.  of  Commerce 223 

1868.                         Saturday,  January  11. 
Rec'd  of  Hon.  H.  L.  Dawes 
Cash  on  acct.  of  stock  in  C. 
M.  of  A. 
$800,  Jan'y    11. 
235'       ''       H' $1^035. 

This  entry  shows  the  payments  for  the  stock  as  made,  it 
being  the  par  value  often  shares  and  interest. 

Then  next  comes  a  statement  of  the  different 
individuals  entitled  to  receive  dividends,  and  the 
amount.  This  book,  which  has  the  dates  printed  in 
it,  runs  over  into  the  next  year  a  day  or  two,  and 
the  following  entries  were  made  without  any  refer- 
ence to  the  date,  being  simply  a  memorandum 
showing  the  amount  of  dividend  due  to  each  of  the 
several  holders  of  the  bonds. 


164  THE    CREDIT    MOBILIER 

1868.  Saturday,  January  1869. 

H.  L.  Dawes X    600  00 

Scofield X    600  00 

Patterson  , X  i  ,800  00 

Painter X  i  ,800  00 

Wilson Xi?2oo  00 

Colfax Xi?20o  00 

Bingham Xi?200  00 

Allison X     600  00 

Kelley X     329  00 

Wilson X     329  00 

Garfield X    329  00 

When  the  amount  had  been  paid,  Mr.  Ames  made 
the  cross  to  show  that  fact.  They  relate  to  the  cash 
dividend  in  June,  1868,  and  show  simply  the  amount 
to  be  paid  each. 

The  next  entry  is  :  — 

1868.  Thursday,  March  5. 

Rec'd  of  Schuyler  Colfax  check  balance  .    .    .  534  72 

The  next  entry  regarding  Mr.  Colfax  is  a  general 
statement  such  as  was  made  in  each  case. 

Colfax. 

20  shares  Credit  Mobilier  cost $2,000  00 

7  mos.  10  days'  int'st 86  72 

2,086  72 
Less  80  pr.  ct.  bds.  at  97 ^i55^  00 

Paid  March  5 534  72 

2,000  U.  P.  stock. 
2,000  C.  M.  stock. 


OF    AMERICA.  165 

This  entry  was  made  previous  to  June,  and  does 
not  include  the  dividend  of  $1,200  cash  at  that  time, 
but  shows  the  amount  which  Mr.  Colfax  paid  to 
balance  the  cost  of  stock. 

There  were  no  other  entries  on  the  book  regarding 
Mr.  Colfax,  except  the  payment  of  the  $1,200, 
which  entry  occurs  as  follows  :  — 

1868.  Sunday,  June  31. 

Checks  on  Commerce,  deposited  with 

sergeant-at-arms $10,000  00 

Pd.  S.  Colfax 1,200  00 

*'   James  F.  Wilson 329  00 

'^    H.  L.  Dawes 600 

''    William  B.  Allison 600 

''    G.  W.  Scofield 600 

''    J.  W.  Patterson 1,800 

*'    John  A.    Logan 329 

*•    James  A.  Garfield 329 

*'    William  D.  Kelley r    •    •  3^9 

*'    Henry  Wilson 1,200 

*'    John  A.  Bingham 1,200 


Although  the  date  would  show  it  was  made 
on  Sunday,  the  remark  made  above  that  these 
simple  memoranda  were  made  on  such  blank 
pages  as  were  convenient,  applies  here  also.  The 
$10,000  Mr.  Ames  deposited  for  the  express  pur- 
pose of  paying  these  dividends  from,  and  as  they 
were  adjusted  he  drew  a  check  on  the  sergeant-at- 
arms  for  the  amount,  and  the  same  was  paid  when 
presented. 


l66  THE    CREDIT   MOBILIER 

Mr.  Ames  here  produced  his  memorandum  book 
for  the  year  1869,  upon  which  there  appeared  one 
entry  regarding  Mr.  Colfax,  as  follows  :  — 

Friday,  January  29,  1869. 

Paid  S.  Colfax  $60.75  for  interest  on  $1500  certificate  of 
U.  P.  R.  R. 

This  entry  was  made  and  the  amount  paid,  as  Mr. 
Ames  testified,  on  the  day  above.  Mr.  Colfax  being 
entitled  to  interest  on  $1,500,  the  same  as  if  the 
bonds  themselves  had  been  actually  divided.  He 
collected  the  interest,  and  paid  the  same  to  Mr. 
Colfax. 

The  next  memorandum  was  as  follows  :  — 

1 868  Wednesday,  January  28. 

Rec'd  of  Glenni  W.  Scofield  check 

on  sergeant-of-arms 708  50 

10  coupons,  350  East  ....     350  00 

Less5p'rc't 17  50  332  5° 


1,041  00 
to  be  invested  in  10  shares  of  Credit  Mobilier  of  America, 
as  trustee,  by  me.  No.  346. 

Immediately  below  this  was  the  following  entry  :  — 
Feb'y    ist,  1868.  —  Del'd  to  Hon.  Glenni  W.  Scofield 

certificate  No.    346,    for    10   shares   of  stock    on    Credit 

Mobilier,  bot.  for  his  account. 

The  next  entry  is  — 

1868.  Sunday,  February  9. 

Reached  Washington  from  N.  Y. 


OF    AMERICA.  167 

Del'd  Glenni  W.  Scofield  one  bond   .     .       1,000 

10   shares   Stock 1,000 

Rec'd  of  G.  W.  Scofield  for  balance  due  on  his  bond 
over  his  div.,  195 -33,  &  endorsed  the  same  on  my  receipt. 

The  bond  was  worth  eighty,  which  Mr.  Scofield 
took,  paying  the  balance  in  cash. 

Then  came  the  entry  of  the  payment  of  the  $600 
cash  dividend,  as  above,  and  in  the  back  of  the 
book,  as  follows  :  — 

G.    W.    SCOFIELD. 

By  cash 1,041 

On  bond i95  33 

1.236  33 
D*rd  him  one  bond i  ,000 

236  33 
1 ,000  Credit. 

1,000  U.  P.  R.  R*d. 

This  entry,  as  it  appeared  upon  Mr.  Ames'  mem- 
orandum book,  is  crossed  out,  showing  it  was  closed, 
and  that  the  whole  transaction  was  ended. 

The  next  entry  is, 

1868.  Friday,  April  24. 

Rec'd  of  Wm.  B.  Allison 271  00 

for    balance    due    on    stock    sold    him,     1,000   in    Credit 
Mobilier,   and    1,000    in    Union   Pacific  R.    road. 

This  amount  is  what  would  be  due  after  the  eighty 
per  cent,  dividend  had  been  credited  on  this  stock. 
This  amount  being  paid  by  Mr.  Allison,  and  there- 
fore not  deducted  from  the  cash  dividend  of  $600  in 
June.  •   , 


l68  THE    CREDIT    MOBILIER 

The  general  statement  is  as  follows  :  — 

WM.    B.    ALLISON. 

Ten  shares  Credit  M i,ooo 

Interest  to  May 46 

1,046 
Dividend  in  Bonds  80  pr.  ct.,  sold  at  97  776 

Cash  to  balance 270 

1,000  C.  M. 
1,000  U.  P. 

This  being   crossed  off,  shows  that  the  account 
was  finally  closed. 
The  next  is  ;  — 

JAMES   F.    WILSON. 

10  shares  C.  M 1,000 

7  mo.  10  days 43  3^ 

1^043  36 
80  pr.  cent.  Div.  at  97 776 

267  36 
Int's't  to  June  20 3  ^4 

1,000  U.  P.  271  00 

1,000  C.  M. 

This  also  was  crossed  off,  showing  it  was  finally 
closed. 

Then  follows  :  — 

1868.  Friday,  February   14. 

Paid  J.  W.  Patterson  for  2,400$  bonds  of  Union 

Pacific  R.  R.  Co.  as  dividend,  less  3  pr.  ct.  .    .    $2,328 
Less  interest  paid 105 

Pd  Cash   ...    J $2,223 

Per  receipt 


OF    AMERICA.  169 

And  at  the  end  of  the  book  the  general  state- 
ment :  — 

Rec'd  ot  J.  W.  Patterson 

Cash  and  Interest 3^105  00 

Rec*d  for  3  Bonds 2,328 

5i433  00 
Feb'y  14  to  Cash 2»328 

ZjIos  00 
3000  U.  P.  Stock 
3000  C.  M.  A.  '' 

The  next  is  the  general  statement  of 

JOHN   A.    BINGHAM. 

by  Cash 2,086  72 

*'  Note 399  32 

to  bonds  .  .  2,000 
Stock  .  .  2,000 
CM..  2,000 

Mr.  Bingham,  it  will  be  remembered,  admitted 
that  he  took  two  bonds,  paid  par,  and  had  the  benefit 
of  them. 

Then  comes  the  general  statement  of 

WM.    D.    KELLEY 

10  shares  C.  M.  A 1,000 

7  mos.  10  days*  int*st 43  36  . 

1,043  36 
80  pr.  ct.  bond  div.  at  97 776 

267  36 
Int'st  to  June  20 3  ^4 

271 

1,000  U.  P.  stock 
1,000  C.  M. 


170  THE    CREDIT    MOBILIER 

This  Statement  was  made  just  previous  to  the 
$600  cash  dividend,  which,  credited  to  his  account, 
leaves  the  balance  due  him  $329,  which  Mr.  Ames 
paid  by  check  on  the  sergeant-at-arms.  This 
account  is  not  crossed  off,  as  Mr.  Ames  had  not  yet 
delivered  him  the  stock  to  which  he  was  entitled. 

There  is  one  other  item  on  this  account : — 

1868.        Tuesday,  September  29. 
William  D.  Kelley  on  com $75^ 

This  is  the  amount  received  later  by  Mr.  Kelley, 
regarding  which  there  was  a  dispute  between  them. 

In  regard  to  the  next  memorandum,  that  of  Mr. 
Garfield,  we  wish  to  give  the  evidence. 

By  the  Chairman  : 

jg.  Now  turn  to  any  entries  you  may  have  in  reference 
to  Mr.  Garfield. 

A.  Mr.  Garfield's  payments  were  just  the  same  as  Mr. 
Kelley's. 

^.  I  find  Mr.  Kelley's  name  on  the  list  of  June  divi- 
dend payments  for  $329.  That,  I  understand  you,  to  be 
the  amount  of  the  June  dividend,  after  paying  the  balance 
due  on  his  stock? 

A.  Yes,  sir  ;  the  general  statement  made  up  for  Mr. 
Garfield  is  as  follows  : 

GARFIELD 

10  shares  Credit  M 1,000 

7  mos.  10  days 43  3^ 

^043  36 
80  per  ct.  bd.  div.  at  97 776 

267  36 


OF   AMERICA.  I'Jl 

267   36 
Int'st  to  June  20 3  64 

»  - 

271   Oo 

1 ,000  C.  M.  ^ 

1,000  U.  P. 

^.     You  received  $600  cash  dividend  on  his  ten  shares  i 

A      Yes,  sir. 

jg  And,  as  you  say,  paid  him  $329,  as  the  balance  of 
the  dividend  due  him  ? 

A,     Yes,  sir. 

^.     The  general  statement  is  not  crossed  off.'* 

A,     No,  sir. 

^.  In  the  list  of  names  for  the  June  dividend,  Mr. 
Garfield's  name  is  down  for  $329.? 

A.     That  w^ould  be  the  balance  due. 

^.  The  cross  opposite  his  name  indicates  that  the 
money  was  paid  to  him  ?' 

A.     Yes,  sir. 

Mr.  Clark  remarked  that  Mr.  Ames  was  not  certain 
whether  this  amount  was  paid  Mr.  Garfield  by  check  or 
in  currency. 

The  Witness.  If  I  drew  the  check  I  may  have  paid 
him  off  in  currency,  as  I  find  no  check  with  initials  cor- 
responding to  his. 

^.  We  find  three  checks  for  the  amount  of  $329  each  ; 
one  is  in  blank ;  there  are  no  initials  written  in.  There 
are,  however,  the  same  number  of  checks  for  that  amount 
as  are  called  for  by  the  names  on  this  list  for  that  amount. 

A.  I  am  not  sure  how  I  paid  Mr.  Garfield  ;  I  paid 
him  in  some  form. 

^.  This  statement  of  Mr.  Garfield's  account  is  not 
crossed  off,  which  indicates,  does  it,  that  the  matter  has 
never  been  settled  or  adjusted  ? 

A,     No,  sir  ;  it  never  has. 


172  THE    CREDIT    MOBILIER 

Next  follows  the  general  statement  of 

LOGAN. 

10  shares  C.  M.  A 1,000 

7  mo.  10  days 43  3^ 

1^043  36 
80  pr.  ct.  Div.  at  97 776 

267  36 
Int'st  to  June  20 .  3  64 

271  00 
1,000  U.  P. 
1,000  C.  M. 

This  general  statement,  like  all  the  others,  was 
made  prior  to  the  June  dividend  of  $600  cash,  and 
when  that  dividend  was  made  there  was  a  balance 
due  Mr.  Logan  of  $329,  which  he  admits  having 
received.  The  account  was  crossed  off,  showing  all 
matters  had  been  adjusted. 

Here  is  the  general  statement  of 

HENRY    WILSON. 

Rec'd  of  him 1,000 

two  bonds  i  ,600 

Less  3  p*r  cent 1^552 

Cash 70 

2,622 
p'd  cash  &  Interest i?54S 

1,074 
2,000  Credit 


2,000  U.  P.  Stock 


OF   AMERICA.  173 

This  account,  having  been  finally  settled,  was 
crossed  off,  as  were  others. 

This  includes  all  the  memoranda  relating  to  mem- 
bers of  Congress,  as  appearing  upon  his  book. 

Upon  the  conclusion  of  Mr.  Ames'  testimony 
regarding  the  memorandum  book,  he  was  cross- 
examined  at  great  length  by  Mr.  Robert  S.  Hale, 
who  appeared  in  behalf  of  Mr.  Colfax,  but  no  new 
feature  was  brought  out,  nor  were  the  former  state- 
ments of  Mr.  Ames  in  the  least  shaken  ;  on  the 
contrary,  his  testimony  was  more  positive.  On  the 
nth  February,  1873,  Mr.  Colfax  again  took  the 
witness  stand,  at  his  own  instance,  and  made  a  long 
statement,  denying  again,  positively,  the  receipt  of 
any  money,  or  dividends,  from  Mr.  Ames.  In 
regard  to  the  deposit  of  $1,200  in  bills  in  his  bank 
immediately  after  the  time  which  the  check  of  Mr. 
Ames  was  given  and  paid  by  the  sergeant-at-arms, 
Mr.  Colfax  attempts  to  explain,  by  saying  that  $200 
on  the  nth  of  July,  another  letter  came  from  Mr. 
of  that  amount  he  received  in  the  month  of  June 
from  his  step-father,  Mr.  Matthews,  on  account  of  a 
debt  which  he  owed  him,  and  then  says  : 

About  the  time  of  this  payment,  and,  as  near  as  I  can 
fix  the  date,  about  the  middle  of  the  month  of  June,  and 
very  soon  after  the  payment  by  Mr.  Matthews,  I  was 
opening  my  letter-mail  at  the  breakfast  table,  in  accord- 
ance with  my  usual  custom,  and  found  an  envelope  within 
another  envelope  postmarked  New  York.  On  opening 
the  inner  envelope,  I  found  it  contained  a  letter  written  by 
George  F.  Nesbitt,  congratulating  me  most  cordially  and 


174  '^^^    CREDIT    MOBILIER 

warmly  on  my  nomination  for  the  Vice-Presidency,  and 
saying  that  the  writer  desired  to  send  me,  confidentially, 
the  remittance  enclosed  to  aid  me  in  the  heavy  expenses 
of  the  canvass,  but  wished  it  kept  a  secret,  as  neither  his 
family  nor  any  one  else  would  ever  know  of  it  unless  I 
told  them.  Inclosed  in  this  letter  was  a  greenback,  or 
national  bank  bill,  for  $1,000. 

He  goes  on,  then,  to  say  how  he  showed  it  to  all 
his  family,  and  speaks  of  the  surprise  that  all 
exhibited  as  it  passed  around  to  each,  and  says  he  is 
sure  he  deposited  it  with  the  $200  received  from  Mr. 
Matthews.  According  to  this,  the  deposit  could 
not  have  been  made  within  a  week  from  the  time  of 
its  receipt.  This  letter,  containing  such  warm  con- 
gratulations, had  been  lost,  and  he  was  unable  to 
produce  it  before  the  committee.  Further  cross- 
examination  brought  out  the  fact  that  on  the  i8th  of 
April,  1868,  Mr.  Colfax  had  received  from  this 
same  Mr.  Nesbitt  a  letter  containing  a  c/ieck  for 
$1,000,  as  a  political  contribution,  and  that  again, 
on  the  nth  of  July,  another  letter  from  Mr. 
Nesbitt,  enclosing  another  c/ieck  for  $1,000,  as  a 
political  contribution.  Both  of  the  letters  containing 
these  remittances,  which  were  both  in  checks,  Mr. 
Colfax  produced  before  the  committee.  There  was 
also  another  contribution  of  $1,000  from  Mr.  Nesbitt 
in  November,  at  the  end  of  the  campaign.  It  may 
only  be  necessary  to  add  that  at  this  time  Mr. 
Nesbitt  held  a  contract  from  the  Post  Office  Depart- 
ment for  supplying  envelopes,  and  Mr.  Colfax 
was  chairman  of  the  Post  Office  Committee  duriuL^ 


OF    AMERICA.  175 

a  considerable  portion  of  the  continuance  of  this 
contract. 

Such,  in  brief,  is  the  testimony  which  the  Polland 
Committee  obtained  from  the  various  witnesses  who 
appeared  before  them  ;  but  all  that  is  of  principal 
importance  is  herein  contained.  It  then  fell  to  the 
province  of  the  committee  to  make  up  from  this 
mass  of  testimony  the  report  which  they  submitted 
to  Congress.  It  would  be  impossible,  in  a  work  of 
this  nature,  to  set  that  report  out  in  full,  and  we 
must  content  ourselves  with  a  brief  summary.  In 
the  testimony  which  precedes,  we  have  taken  the 
report  of  the  committee  as  the  true  statement  of  that 
evidence,  except  where  we  differ  from  that  report, 
and  where  it  became  necessary  to  account  for  the 
difference  of  opinion  we  entertain  regarding  it. 

The  committee  say  that  in  December,  1867,  after 
Mr.  Ames  came  to  attend  the  regular  session  of 
Congress,  then  opened,  he  made  arrangements  with 
certain  members  of  Congress  to  take  stock  in  the 
Credit  Mobilier,  and  that  he  sold  it  to  them  at  par 
and  accrued  interest  from  the  July  previous,  while, 
in  fact,  the  stock  at  that  time  was  of  far  greater 
value,  and  was  finding  a  ready  sale  at  prices  varying 
from  $160  to  $225  per  share  ;  that  Mr.  Ames,  in 
selling  at  this  price,  did  So  for  the  purpose  of  creat- 
ing such  an  interest  in  the  recipients  that  their  actions 
on  any  matter  to  be  brought  before  Congress,  affect- 
ing the  Union  Pacific  Railroad,  would  be  influenced 
in  favor  of  the  road,  and  to  this  extent  must  be  con- 
sidered a  bribe  ;    and  they  found  that  this  was  the 


176  THE    CREDIT    MOBILIER 

object  of  Mr.  Ames.     To  follow  the  language  of  the 
report :  — 

The  committee  do  not  find  that  Mr.  Ames,  in  his  nego- 
tiations with  the  persons  above  named,  entered  into  any 
detail  of  the  relations  between  the  Credit  Mobilier  Com- 
pany and  the  Union  Pacific  Company,  or  gave  them  any 
specific  information  as  to  the  amount  of  dividends  they 
would  be  likely  to  receive. 

And  again  :  — 

The  Credit  Mobilier  Company  was  a  state  corporation 
not  subject  to  Congressional  legislation,  and  the  fact  that 
its  profits  were  to  be  derived  from  the  building  of  the 
Union  Pacific  Railroad  did  not  apparently  create  such  an 
interest  in  that  company  as  to  disqualify  the  holder  of 
Credit  Mobilier  stock  from  participating  in  any  legislation 
afiecting  the  railroad.  In  his  negotiations  with  these 
members  of  Congress  Mr.  Ames  made  no  suggestion  that 
he  desired  to  secure  their  favorable  influence  in  Congress 
in  favor  of  the  railroad  company,  and  whenever  the  ques- 
tion was  raised  as  to  whether  the  ownership  of  this  stock 
would  in  any  way  interfere  with,  or  embarrass  them  in, 
their  action  as  members  of  Congress,  he  assured  them  it 
would  not. 

And  again  :  — 

The  committee  have  not  been  able  to  find  that  any  of 
these  members  of  Congress  have  been  affected  in  their 
ofiicial  action  in  consequence  of  their  interest  in  Credit 
Mobilier  stock. 

But  the  report  goes  on  :  — 

The  committee  are  also  satisfied  that  Mr.  Ames  enter- 
tained a  fear  that,  when  the  true  relations  between  the 
Credit  Mobilier  Companv  and  the  Union  Pacific  became 


OF    AMERICA.  1 77 

generally  known,  and  the  means  by  which  the  great 
profits  expected  to  be  made  were  fully  understood,  there 
was  danger  that  Congressional  investigation  and  action 
would  be  invoked. 

The  members  of  Congress  with  whom  he  dealt  were 
generally  those  who  had  been  friendly  and  favorable  to  a 
Pacific  Railroad,  and  Mr.  Ames  did  not  fear,  or  expect  to 
find  them  favorable  to  movements  hostile  to  it ;  but  he 
desired  to  stimulate  their  activity  and  watchfulness  in 
opposition  to  any  unfavorable  action  by  giving  them  a 
personal  interest  in  the  success  of  the  enterprise,  espec- 
ially so  far  as  it  affected  the  interest  of  the  Credit  Mobilier 
Company.  On  the  9th  day  of  December,  1867,  Mr.  C. 
C.  Washburn,  of  Wisconsin,  introduced  in  the  House 
a  bill  to  regulate  by  law  the  rates  of  transportation  over 
the  Pacific  Railroad. 

Mr.  Ames,  as  well  as  others  interested  in  the  Union 
Pacific  road,  was  opposed  to  this,  and  desired  to  defeat 
it.  Other  measures,  apparently  hostile  to  that  company, 
were  subsequently  introduced  into  the  House  by  Mr. 
Washburn,  of  Wisconsin,  and  Mr.  Washburne,  of  Illi- 
nois. The  Committee  believe  that  Mr.  Ames,  in  his  dis- 
tributions of  stock,  had  specially  in  mind  the  hostile  efforts 
of  the  Messrs.  Washburn,  and  desired  to  gain  strength  to 
secure  their  defeat.  The  reference  in  one  of  his  letters  to 
"  Washburne's  move"  makes  this  quite  apparent. 

The  committee  also  set  out  the  transactions  of 
Mr.  Ames  with  the  several  members  of  Congress 
substantially  as  above,  and  after  reflecting  severely 
upon  his  conduct,  concluded  with  the  following 
resolulution  : 

I.  Whereas^  Mr.  Oakes  Ames,  a  Representative  in 
this  House,  from  the  State  of  Massachusetts,   has   been 


178  THE    CREDIT    MOBILIER 

guilty  of  selling  to  members  of  Congress  shares  of  stock  in 
the  Credit  Mobilier  of  America,  for  prices  much  below  the 
true  value  of  such  stock,  with  intent  thereby  to  influence 
the  votes  and  decisions  of  such  members  in  matters  to  be 
brought  before  Congress  for  action  :  Therefore 

Resolved^  That  Mr.  Oakes  Ames  be,  and  he  is  hereby, 
expelled  from  his  seat  as  a  member  of  this  House. 

2.  Whereas  Mr.  James  Brooks,  a  Representative  in 
this  House  from  the  State  of  New  York,  did  procure  the 
Credit  Mobilier  Company  to  issue  and  deliver  to  Charles 
H.  Neilson,  for  the  use  and  benefit  of  said  Brooks,  fifty 
shares  of  the  stock  of  said  company,  at  a  price  much 
below  its  real  value,  well  knowing  that  the  same  was  so 
issued  and  delivered  with  intent  to  influence  the  votes  and 
decisions  of  said  Brooks  as  a  member  of  the  House  in  mat- 
ters to  be  brought  before  Congress  for  action,  and  also  to 
influence  the  action  of  said  Brooks  as  a  government  direc- 
tor in  the  Union  Pacific  Railroad  Company:  Therefore, 

Resolved^  That  Mr.  James  Brooks  be,  and  he  is 
hereby,  expelled  from  his  seat  as  a  member  in  this  House. 

There  are  a  few  observations  which  it  may  be 
necessary  to  speak  of.  It  was  by  no  means  settled 
by  the  testimony  whether  Mr.  Ames  solicited  these 
members  of  Congress  to  take  the  stock,  or  whether 
they  came  to  him  first.  It  certainly  was  uncontra- 
dicted that  in  some  cases  these  members  came  to  him 
in  regard  to  other  investments,  and  when  he  recom- 
mended the  Credit  Mobilier,  and  gave  them  refer- 
ences concerning  it,  they  took  the  pains  to  investigate, 
and  then  said  they  would  purchase  the  stock.  The 
whole  evidence  shows  it  to  have  been  as  any  regular 
business  transaction.     The  stock  which  Mr.  Ames 


OF    AMERICA.  I79 

sold  to  members  of  Congress  was  his  own,  which  he 
had  paid  for  to  the  Credit  Mobilier  Company,  at  par. 
The  question  as  to  the  time  of  these  contracts  for  the 
sale  of  this  stock  has  indeed  a  very  important  bear- 
ing in  ascertaining  the  value  of  the  stock  which  was 
sold  by  Mr.  Ames.  There  was  no  conflict  in  the 
testimony  of  any  of  the  many  witnesses,  that  it  was 
immediately  after  the  opening  of  Congress  in  the 
winter  of  1867-68,  that  all  these  conversations  were 
had  between  Mr.  Ames  and  those  who  purchased  or 
who  were  approached  by  him  regarding  this  stock. 
Five  years  had  passed  before  this  investigation 
began,  and  facts  and  dates  might  easily  pass  from 
memory.  In  the  year  1867  there  was  an  adjourned 
session  of  Congress,  which  met  in  the  month  of 
November,  and  continued  in  session  day  after  day 
until  the  regular  session  opened  on  the  second  day 
of  December.  The  two  sessions  ran  into  each  other, 
the  one  being  closed  and  the  other  immediately 
opened.  When  this  adjourned  session  opened,  and 
for  nearly  six  weeks  thereafter,  the  stock  of  the 
Credit  Mobilier  was  offered  for  sale  freely  at  par, 
with  no  buyers,  and  a  sale  was  only  occasionally 
made,  and  at  less  than  par.  Yet  here  is  a  fact, 
important  in  its  bearings  as  it  is,  that  was  entirely 
overlooked  by  all  the  witnesses  who  testified,  and 
especially  by  Mr.  Ames,  to  whom  it  was  so  impor- 
tant. Search  may  be  made  through  the  entire  testi- 
mony of  every  witness,  without  finding  any  mention 
of  it  whatever.  Yet,  as  we  said  before,  there  was  no 
conflict  in  the  testimony  of  all  the  witnesses,  that  all 


l8o  THE    CREDIT    MOBII.IER 

these  sales,  or  contracts,  were  agreed  upon  imme- 
diately after  the  assembling  of  Congress.  It  must, 
therefore,  have  been  in  the  month  of  November,  or  the 
early  days  of  December,  at  a  time  prior  to  the  decla- 
ration of  any  dividends  on  Credit  Mobilier  stock, 
prior  to  any  increase  in  its  value,  and  at  a  time  when 
it  was  a  most  difficult  matter  to  dispose  of  the  stock 
to  any  one  at  so  high  a  price  as  par.  It  needed, 
therefore,  the  earnest  solicitation  of  Mr.  Ames  to 
induce  members  to  buy.  .He  assured  them  that  the 
stock  would  be  a  good  paying  investment ;  but  there 
was  not  a  particle  of  evidence  showing  what  the 
dividends  might  be  ;  —  nor  was  any  statement  made, 
because,  at  the  time  the  contracts  for  the  sales  were 
made,  it  was  not  known  that  any  dividend  would 
be  declared  for  some  time  in  the  future.  The  value 
of  the  stock  was  entirely  speculative,  and  those  who 
bought,  or  agreed  to  buy,  did  so  as  an" investment, 
the  same  as  any  other  man  would  do  under  similar 
circumstances.  There  were  violent  objections  made 
to  declaring  these  first  dividends,  and  the  first  one 
was  declared  on  the  12th  of  December,  1867.  It 
was  not  until  some  time  after  this  that  the  value  of 
the  stock  began  to  rise*  It  was  after  this  that  Mr. 
Ames  made  his  request  to  have  shares  of  the  stock 
issued  him  by  the  Credit  Mobilier  Company,  in  order 
that  he  might  fulfil  the  obligations  he  had  incurred. 
His  agreement  was  that  this  stock  should  be  deliv- 
ered at  par  and  interest  from  the  July  previous,  and 
though  the  price  in  the  meantime  had  greatly  m- 
creased,  still  his  word  was  as  binding  to  him  as  his 


OF    AMERICA.  I«I 

bond.  He  delivered  the  stock  as  he  had  agreed, 
though  it  was  then  far  above  the  price  he  received. 
But,  to  be  accurate,  he  did  not  deliver  it,  but  held  it 
in  trust  for  those  parties  who  had  agreed  to  purchase. 
And  why  did  he  do  this?  The  answer  is  plain.  Had 
he  given  the  stock  to  each  buyer,  and  had  that  trans- 
fer recorded  on  the  books  of  the  Credit  Mobilier,  the 
holder  would  not  have  been  entitled  to  any  dividends, 
unless,  being  also  a  holder  of  Union  Pacific  stock,  he 
had  given  his  irrevocable  proxy  to  the  trustees.  But 
while  the  stock  remained  in  the  name  of  Mr.  Ames  on 
the  books  of  the  Credit  Mobilier,  it  would  be  entitled 
to  its  dividends  when  any  should  be  declared.  And 
for  this  reason  no  other  transfer  of  the  stock  was 
made,  and  Mr.  Ames  merely  made  a  memorandum 
on  his  private  book  regarding  it,  and  without  any 
pretense  of  system.  Mr.  Ames  was  not  a  book- 
kee'per ;  and  in  all  those  extraordinary  transactions 
of  business  in  which  he  was  daily  engaged,  he  car- 
ried the  details  in  his  head,  trusting  and  relying  upon 
his  memory  for  all  the  accuracy  he  desired,  and  he 
never  made  an  error. 

There  can  be  no  manner  of  question  but  that  Mr. 
Ames  sold  this  stock,  and  that  certain  members  of 
Congress  purchased  it,  for  this  was  admitted  by 
all ;  whether  a  certain  few  who  positively  denied 
it  made  investments,  is  another  question.  Henry 
Wilson,  John  A.  Logan,  Henry  L.  Dawes,  Glenni 
W.  Scofield,  John  A.  Bingham,  B.  F.  Boyer,  Wil- 
liam B.  Allison,  James  F.  Wilson  —  all  admitted 
that  they  bought  it,  and  a  portion  of  them  returned 


l82  THE    CREDIT    MOBILIER 

it,  while  another  portion  of  them  retained  it.  There 
is  no  conflict  in  the  testimony  of  these  men,  (unless 
it  was  in  that  of  Mr.  Allison) ,  and  that  of  Mr.  Ames. 
In  relation  to  James  A.  Garfield  and  Schuyler 
Colfax,  the  very  same  testimony  applied  to  them 
that  applied  to  the  others  —  the  same  chain  of  cir- 
cumstances connected  them  all.  No  question  can 
remain  in  the  mind  of  any  who  will  read  the  state- 
ments of  the  parties,  and  the  testimony  and  evidence, 
but  that  these  two  were  untruthful,  —  that  their 
statements  and  explanations  were  wholly  and  abso- 
lutely false  from  beginning  to  end,  and  that  Mr. 
Ames  told  only  the  truth,  and  that  his  record  of 
sales  was  true.  Mr.  Garfield  having  made  his  state- 
ment, and  being  confronted  by  the  statements  and 
evidence  produced  by  Mr.  Ames,  which  proved 
beyond  all  doubt  in  the  mind  of  any  one  that  the 
oath  of  Mr.  Garfield  was  false,  remained  quiet  and 
never  opened  his  mouth  to  ofler  an  explanation,  to 
ask  a  question,  or  deny  an  assertion  made  by  Mr. 
An^es.  He  had  expected,  after  making  his  state- 
ment, that  Mr.  Ames  would  corroborate  it,  and  thus 
place  him  before  the  world  as  clean  and  pure ;  but, 
when  he  found  that  Mr.  Ames  would  tell  the  truth, 
he  was  wise  enough  to  see  that  any  controversy 
with  Mr.  Ames  on  this  point  would  consign  him 
to  a  political  grave.  He  therefore  remained  silent. 
Not  so  with  poor  Colfax.  He  tried  to  break  down 
the  testimony  of  Mr.  Ames,  and  each  step  only 
involved  him  deeper  and  deeper  in  falsehood. 
Every  move  he  made  only  cast  still  stronger  upon 


OF   AMERICA.  1^3 

him  the  conviction  of  the  entire  nation  that  he 
was  false,  and  that  Mr.  Ames  was  telling  the 
truth. 

A  word  or  two  as  to  the  findings  of  the  committee. 
They  could  not  find  that  Mr.  Ames  had  used  any 
persuasion  to  get  congressmen  to  buy  the  stock,  or 
that  he  had  made  any  particular  representation  as  to 
its  .value,  or  the  dividends  to  be  expected.  They 
could  not  find  that  the  holding  of  this  stock  would 
create  such  an  interest  as  to  disqualify  the  holder  in 
participating  in  any  legislation  affecting  the  Pacific 
road  ;  and  they  found,  as  a  fact,  that  none  of  them 
had  been  influenced,  in  their  legislative  actions,  in 
consequence  of  their  holding  the  stock. 

But  in  spite  of  this,  in  view  even  of  the  fact  that 
the  possession  of  such  would  not  and  did  not  create 
any  unlawful  interest,  the  committee  were  of  the 
opinion  that  Mr.  Ames  had  sold  it  to  them  with  that 
purpose  in  view,  and  that  he  intended  to  do  that 
which  the  committee  found  could  not  be  done,  there- 
fore, as  it  was  necessary  for  them  to  find  some  one 
guilty,  they  did  find — at  least  they  said  they  did — 
that  Mr.  Ames  had  been  guilty  of  bribery,  and 
should  therefore  be  expelled. 

The  only  evidence  of  bribery  before  the  com- 
mittee was  that  of  Mr.  McComb,  which  was  so 
sifted  as  to  prove  every  material  statement  made  by 
him  to  be  without  the  shadow  of  a  foundation ;  but 
it  must  have  been  upon  this  that  the  committee 
based  their  findings,  or  else  on  their  own  imagina- 
tions, for  there  was  nothing  else. 


184  THE    CREDIT    MOBILIER 

As  to  the  influence  that  was  exerted  upon  these 
members  of  Congress  who  had  purchased  the  stock, 
the  records  of  Congress  show  that  on  the  bill  in- 
structing the  attorney-general  to  investigate  whether 
the  Union  Pacific  and  Central  Pacific  railroads  had 
not  both  forfeited  their  franchises,  and  directinp-  the 
withholding  of  bonds  until  the  matter  was  decided, 
each  and  every  one  of  these  members  voted  for^it, 
with  the  exception  of  Mr.  Brooks,  and  he  opposed 
it  on  special  grounds  which  he  then  assigned.  Mr. 
Wilson  of  Iowa  was  the  author  of  the  clause  secur- 
ing the  government  lien  on  interest  due.  Mr.  Bout- 
well  forced  the  collection  of  the  interest,  and  caused 
Mr.  Ames  to  fail  in  business.  Mr.  Bingham,  of 
Ohio,  called  up  the  most  stringent  bill  to  protect  the 
interest  of  the  government  passed  since  the  legisla- 
tion of  1864,  and  advocated  it,  and  it  was  this  that 
all  voted  for  when  the  bill  overruling  Mr.  Boutwell's 
order  for  collecting  the  interest  came  up  before  the 
house.  Mr.  Dawes  and  Mr.  Allison,  at  the  time, 
were  absent  at  a  meeting  of  conference  committees, 
and  so  could  not  vote.  The  story  that  Colfax  ruled 
out  the  resolution  of  Mr.  Washburne,  of  Wisconsin, 
fixing  freight  rates  on  these  roads,  is  shown  by  the 
Congressional  Globe  to  be  without  foundation.  In- 
deed the  committee  were  justified  in  finding  that 
these  members  had  not  been  influenced  by  reason  of 
the  stock  they  held. 

The  debate  upon  these  reports  lasted  two  days  and 
evenings  and  part  of  the  third  day,  and  was  partici- 
pated in  by  a  large  number  of  the  members ;  very 


OF    AMERICA.  1 85 

few,  however,  had  the  courage  to  stand  against  the 
report  of  the  committee.  In  fact,  as  the  evidence 
was  so  bulky,  they  had  not  the  time  to  investigate  it 
or  study  it,  and  therefore  could  not  discover  the  fear- 
ful errors  into  which  the  committee  had  fallen.  In 
the  meantime  the  Judiciary  committee  of  the  House 
had  made  a  lengthy  report,  in  which  they  held, 
adversely  to  the  committee  on  investigation,  that 
Congress  had  no  right  or  power  to  expel  a  member 
for  acts  committed  prior  to  his  election  as  a  member 
of  that  body. 

We  shall  make  no  attempt  to  follow  these  argu- 
ments in  this  place,  many  of  which  were  couched  in 
language  of  purest  eloquence  and  deep  research. 
The  one  most  listened  to  was  that  of  the  most  inter- 
ested party  in  this  unfortunate  controversy,  that  of 
Oakes  Ames,  which  was  read  from  the  clerk's  desk. 
Inasmuch  as  it  presents  a  most  thorough  summary 
of  the  whole  subject-matter,  not  merely  of  the  evi- 
dence elicited,  but  also  the  history  of  the  Credit 
Mobilier  and  its  conection  with  the  Pacific  road,  we 
shall  ask  the  privilege  of  setting  it  forth  entire,  and 
asking  for  its  earnest  perusal. 


IX. 
DEFENCE    OF    OAKES   AMES 

AGAINST    THE    CHARGE    OF   SELLING  TO  MEMBERS    OF 
CONGRESS     SHARES    OF    THE    CAPITAL    STOCK 
OF    THE     CREDIT    MOBILIER    OF    AMER- 
ICA,  WITH   INTENT  TO  BRIBE   SAID 
MEMBERS   OF    CONGRESS. 


Read  in  the  House  of  Representatives,  February  25,  1873. 


"D  EFORE  the  House  proceeds  to  the  consideration 
-■-^  of  the  resolution  reported  on  Tuesday  last  by 
the  special  committee  charged  with  the  investigation 
of  alleged  transactions  with  certain  members  of  this 
body,  in  the  disposition  of  shares  of  the  capital  stock 
of  the  Credit  Mobilier  of  America,  I  desire  to  sub- 
mit the  following  statement : 

The  charges  on  which  said  resolution  is  based 
relate  to  events  so  intimately  connected  with  a  por- 
tion of  the  history  of  the  construction  of  the  Union 
Pacific  railroad  that  I  shall  ask  the  indulgence  of 
the  House  while  I  proceed  to  trace  such  history  in 
greater  detail  than  would  otherwise  be  necessary.     . 

On  the  ist  day  of  July,  1862,  was  passed  and 
approved  an  act  of  Congress,  authorizing  and  pro- 
viding for  the  construction  of  a  railroad  and  tele- 
graph line  from    the    Missouri  river  to  the  Pacific 


THE   CREDIT   MOBILIER.  187 

ocean.  The  practicability  and  importance  of  such 
a  measure  had  long  been  urged  by  our  most  saga- 
cious public  men,  but  it  failed  to  receive  the  sanction 
of  the  government,  until  a  great  civil  war  threatened 
to  result  in  the  withdrawal  of  the  States  and  Terri- 
tories of  the  Pacific  coast  from  the  authority  of  the 
Federal  Government.  For  a  variety  of  reasons, 
then  long  before  the  public,  but  chiefly  to  avert  the 
calamity  indicated,  this  act  was  passed.  It  was 
universally  esteemed  not  only  a  measure  of  sound 
policy,  but  a  scheme  appealing  to  the  patriotism  and 
loyalty  of  the  capitalists  of  the  United  States,  as 
the  instrument  whereby  future  separation  of  the 
Pacific  from  the  Atlantic  States  would  be  rendered 
forever  impossible. 

The  meeting  of  commissioners  named  in  the  act 
to  carry  the  same  into  effect,  by  the  organization 
of  the  corporation,  was  held  pursuant  to  act  of 
Congress,  on  the  first  Tuesday  of  September,  1862. 
Though  composed  of  a  great  number  of  the  leading 
capitalists  of  the  country,  and,  in  addition  to  the 
ordinary  inducement  of  pecuniary  advantage,  acting 
under  the  stimulus  of  patriotic  ardor,  the  meeting 
failed  to  accomplish  anything  beyond  the  opening  of 
books  of  subscription.  Not  a  dollar  of  stock  was  sub- 
scribed or  promised,  and  it  was  not  until  about  the 
27th  day  of  October,  1863  —  and  then  only  with  the 
explicit  understanding  on  the  part  of  the  subscribers 
that  in  case  of  failure  to  secure  future  legislation  the 
project  must  be  abandoned — that  a  suflScient  sub- 
scription was  obtained  to  authorize  the  election  of  a 


l88  THE    CREDIT    MOBILIER 

board  of  directors.  On  this  subscription  was  the 
name  of  no  recognized  capitalist.  Parties  known  to 
the  country  as  wielding  large  capital  in  railroad 
enterprises  had  studiously  avoided  all  affarent 
association  with  the  enterprise,  and  in  their  place 
appeared  a  class  of  comparatively  unknown  men 
whose  names,  when  rising  to  the  surface,  had  been 
chiefly  connected  with  enterprises  involving  specu- 
lative and  extra-hazardous  risks.  Until  the  passage 
of  the  law  heretofore  mentioned,  nothing  was  done 
under  this  organization  beyond  such  acts  as  were 
necessary  to  preserve  the  existence  of  the  corpora- 
tion. 

Then  came  the  act  of  July  2,  1864.  Its  principal 
features  were  as  follows  :  It  authorized  a  reduction 
of  the  par  value  of  the  shares  from  one  thousand  to 
one  hundred  dollars,  with  a  corresponding  increase 
in  number ;  it  enlarged  the  land  grant  from  a  ten  to 
a  twenty-mile  limit ;  it  authorized  the  company  to 
issue  first  mortgage  bonds  on  its  railroad  and  tele- 
graph, to  an  amount  per  mile  equal  to  the  amount 
of  United  States  bonds  authorized  to  be  issued 
to  the  company  in  aid  of  the  construction  of  the 
road,  and  made,  the  mortgage  securing  the  same  a 
lien  prior  to  that  of  the  United  States  ;  it  declared 
that  only  one-half  of  the  compensation  for  services 
rendered  for  the  government  should  be  required  to 
be  applied  to  the  payment  of  the  bonds  issued  by 
the  government  in  aid  of  construction.  While  thus 
strengthening  the  company  by  these  changes,  Con- 
gress, at  the  same  time,  and  in  the  same  act,  dealt 


OF    AMERICA.  1 89 

it  two  well-nigh  fatal  blows,  from  the  effect  of 
which  complete  recovery  is  impossible.  It  author- 
ized the  Kansas  Pacific,  which  was  required  to  effect 
a  junction  with  the  Union  Pacific  not  farther  west 
than  the  looth  meridian  of  longitude  —  a  distance 
of  about  247  miles  west  of  the  Missouri  River — to 
make  such  connection  at  any  point  westwardly  of 
such  initial  point  deemed  practicable  or  desirable. 
The  result  is  a  rival  parallel  road  connecting  with 
the  Union  Pacific  at  a  point  516  miles  west  of  the 
Missouri  River — being  one-half  the  length  of  that 
road — and  claiming  equal  advantages  and  facilities 
in  all  running  connections  and  interchange  of  busi- 
ness. It  likewise  provided  that  in  case  the  Central 
Pacific  should  reach  the  eastern  boundary  of  Cali- 
fornia before  the  Union  Pacific  should  be  built  to 
that  point,  the  former  company  should  have  the 
right  to  extend  its  road  150  miles  eastward,  and  this 
power  was  afterwards  enlarged  by  Congress  by  act 
of  July  2d,  1866,  so  as  to  authorize  such  extension 
indefinitely,  until  the  two  roads  should  meet.  Thus, 
by  act  of  Congress,  these  two  corporations  were  sent 
forth  upon  a  race  across  the  continent,  which  finally 
culminated  in  the  construction  of  500  miles  of  road 
by  each  company  in  a  single  season,  through  a  desert 
country,  upon  a  route  beset  by  unparalleled  obsta- 
cles, and  at  a  necessary  cost  largely  in  excess  of 
the  most  extravagant  estimates. 

It  is  in  testimony  before  a  committee  of  the  House 
that,  after  the  impracticability  of  building  the  road 
under  the  first  act  had  been  demonstrated,  when  it 


190 


THE    CREDIT    MOBILIER 


had  become  apparent  that  additional  aid  was  neces- 
sary to  induce  capitalists  to  embark  in  the  enterprise, 
the  late  President  Lincoln  was  urgent  that  Congress 
should  not  withhold  the  additional  assistance  asked, 
and  that  he  personally  advised  the  officers  of  the 
company  to  go  to  Congress  for  such  legislation  as 
would  assure  the  success  of  the  enterprise,  declaring 
it  a  national  necessity,  and  recommending  them  to 
apply, for  additional  concessions,  ample  to  place  the 
construction  of  the  road  beyond  a  peradventure. 

Notwithstanding  this  favorable  legislation,  no  cap- 
ital was  attracted,  no  additional  stock  subscribec'. 
On  the  8th  of  August,  1864,  a  contract  for  building 
one  hundred  miles  west  from  the  Missouri  river  was 
let  to  H.  M.  Hoxie,  the  only  contractor  offering  to 
undertake  so  hazardous  a  venture.  Six  months 
demonstrated  his  inability  to  perform  his  contract, 
and  with  the  experience  of  the  company  in  dealing 
with  individual  contractors,  no  course  seemed  open, 
except  to  seek  a  consolidation  of  personal  means  into 
a  corporate  body,  whereby  the  pecuniary  liability 
of  a  large  number  of  persons  might  be  made  avail- 
able to  the  task  of  constructing  the  road,  while  at 
the  same  time  enjoying  the  shelter  of  corporate  lia- 
bility only.  Accordingly,  by  a  contract  made  March 
15,  1865,  the  Credit  Mobilier  of  America,  a  corpora- 
tion created  by  and  organized  under  the  laws  of 
Pennsylvania,  in  substance  assumed  the  obligations 
of  the  Hoxie  contract  and  entered  upon  its  perform- 
ance. It  was  soon  manifest  that  even  this  organi- 
zation,   as   then    constituted,    would    be    unable    to 


OF    AMERICA.  I9I 

accomplish  the  work  for  which  it  was  created.  The 
state  of  the  country  and  the  peculiar  local  conditions 
surrounding  the  enterprise  were  exceedingly  unfav- 
orable to  a  successful  prosecution  of  the  work.  Gold 
was  one  hundred  and  fifty ;  there  was  no  market  for 
the  first  mortgage  bonds,  and  the  government  bonds, 
payable  in  currency,  were  of  uncertain  value  and 
of  diflicult  sale.  No  eastern  railroad  connection 
existed  whereby  the  vast  amount  of  material  essen- 
tial to  construction  could  find  reasonable  and  rapid 
transportation  to  the  line  of  the  road ;  it  was  com- 
pelled, instead,  to  follow  the  long  and  tedious  route 
of  the  Missouri  river,  at  an  extraordinary  cost  for 
transportation,  and  without  insurance  against  the 
perils  of  the  hazardous  navigation  of  that  treacher- 
ous stream.  All  materials  were  high,  and  all  classes 
of  labor  scarce,  and  only  to  be  obtained  in  limited 
quantities,  at  extravagant  prices.  Add  to  this  the 
universal  distrust  in  financial  circles  of  the  ultimate 
completion  of  the  road,  and  the  general  conviction 
that  when  completed  it  would  fail  to  prove  remuner- 
ative or  profitable,  and  it  is  easy  to  anticipate  the 
result  which  speedily  followed,  viz.,  the  practical 
failure  of  the  new  organization  to  carry  forward  the 
work  until  reinforced  by  a  new  class  of  capitalists, 
bringing  with  them  larger  means  and  a  more  power- 
ful influence  in  the  financial  world. 

Early  in  September,  1865,  it  became  manifest  that 
the  contract  could  not  be  performed,  and  that  the 
work  must  stop,  unless  additional  strength  could  be 
imparted   to    the    corporation.      Accordingly,    after 


192  THE    CREDIT    MOBII.IKR 

urgent  solicitation  and  long  consideration,  myself 
and  others  associated  with  me,  for  the  first  time, 
took  an  interest  in  the  organization.  Its  capital 
stock  was  increased,  additional  money  was  raised, 
and  the  work  went  forward.  Under  this  arrange- 
ment two  hundred  and  forty-seven  miles  of  road 
were  built,  when,  on  i6th  day  of  August,  1867,  it 
was  superseded  by  the  Oakes  Ames  contract,  so 
called,  and  this  contract  was,  on  the  15th  day  of 
October,  1867,  assigned  to  seven  persons,  as  trustees, 
and  under  it  six  hundred  and  sixty-seven  miles  of 
road  were  built. 

The  alleged  corrupt  transactions  imputed  to  me  are 
all  charged  to  have  been  initiated  in  December,  1867. 
Glance  for  a  moment  at  the  situation  of  the  Union 
Pacific  Company  and  my  connection  with  it  at  that 
time.  After  a  long  and  nearly  ineffectual  struggle, 
the  final  construction  of  the  road  had  been  assured 
by  my  intervention  in  its  affairs.  No  one  doubted 
that  it  would  be  rapidly  pushed  to  completion.  Con- 
gress had  long  before,  and  not  at  my  instance, 
enacted  the  laws  tendering  inducements  to  the  Capital- 
ists of  the  country  to  embark  in  the  construction  of 
the  road,  and  I  and  my  associates  accepted  its  offers 
and  undertook  the  work.  The  company  had  no 
reason  to  apprehend  unfriendly  or  hostile  legislation, 
for  every  department  of  the  government  manifested 
a  friendly  attitude,  and  the  whole  country  was  loud 
in  demonstrations  of  approval  of  the  energy  and 
activity  which  we  had  infused  into  the  enterprise. 
Heads  of  departments  and  government  officials,  of 


OF    AMERICA. 


193 


every  grade,  whose  duties  brought  them  in  contact 
with  the  affairs  of  the  company,  were  clamorous  for 
increased  speed  of  construction,  and  never  lost  an 
opportunity  of  expressing  approval  of  the  work  and 
urging  it  forward.  It  had  never  entered  my  mind 
that  the  company  would  ask  for  or  need  additional 
legislation,  and  it  would  have  been  difficult  to  find  a 
man  so  reckless  of  popular  opinion  as  to  have  lent 
himself  to  a  crusade  against  an  organization  whose 
praises  everywhere  filled  the  press  and  were  on  the 
lips  of  the  people.  As  a  matter  of  history,  no  legis- 
lation, at  all  effecting  the  pecuniary  interests  of  the 
company,  was  asked  for  for  three  years  and  a  half 
after  the  date  of  the  alleged  sales  by  me  of  Credit 
Mobilier  stock,  and  then  only  in  settlement  of  a 
purely  judicial  question,  suddenly  and  without  warn- 
ing sprung  upon  it,  in  a  critical  period  of  its  fortunes, 
and  in  relation  to  which  no  controversy  had  ever 
before  been  made.  Under  no  other  state  of  affairs, 
and  in  no  other  attitude  of  the  government,  could  I 
for  a  moment  have  been  induced  to  assume  the 
enormous  responsibility  entailed  by  a  contract  in- 
volving a  liability  of  forty-seven  millions  of  dollars. 
To  undertake  the  construction  of  a  railroad,  at  any 
price,  for  a  distance  of  nearly  seven  hundred  miles, 
in  a  desert  and  unexplored  country,  its  line  crossing 
three  mountain  ranges,  at  the  highest  elevations  yet 
attempted  on  this  continent,  extending  through  a 
country  swarming  with  hostile  Indians,  by  whom 
locating  engineers  and  conductors  of  construction 
trains  were  repeatedly  killed  and  scalped  at  their 


194 


THE    CREDIT    MOBILIER 


work,  upon  a  route  destitute  of  water,  except  as 
supplied  by  water  trains  hauled  from  one  to  one 
hundred  and  fifty  miles,  to  thousands  of  men  and 
animals  engaged  in  construction,  the  immense  mass 
of  material,  iron,  ties,  lumber,  timber,  provisions, 
and  supplies  necessary,  to  be  transported  from  five 
hundred  to  fifteen  hundred  miles,  I  admit  might 
well,  in  the  light  of  subsequent  history  and  the 
mutations  of  opinion,  be  regarded  as  the  freak  of  a 
madman,  if  it  did  not  challenge  the  recognition  of  a 
higher  motive,  namely,  the  desire  to  connect  my 
name  conspicuously  with  the  greatest  public  work 
of  the  present  century.  It  is  by  no  means  strange 
that  my  credit  with  conservative  financiers  like  Gov- 
ernor Washburn  should  have  been  shaken,  and  that 
he  should  have  hastened  to  call  in  loans  which,  in  his 
judgment,  this  contract  proved  to  be  in  unsafe  hands. 

Under  these  circumstances,  with  all  legislation 
sought  granted,  and  no  future  action  of  Congress  to 
be  asked  for  or  feared,  it  is  charged  that  I  "  have 
been  guilty  of  selling  to  members  of  Congress  shares 
of  stock  in  the  Credit  Mobilier  of  America,  for  prices 
below  the  true  value  of  such  stock,  with  intent  to 
influence  the  votes  and  decisions  of  such  members 
in  matters  to  be  brought  before  Congress  for  action." 

If  this  charge  is  true,  it  is  predicated  upon  three 
facts,  all  of  which  should  be  shown  to  the  satisfac- 
tion of  this  body,  in  order  to  justify  the  extreme 
measures  recommended  by  the  committee. 

First.  The  shares  must  have  been  sold  at  prices 
so  manifestly  and  palpably  below  the  true  value  as 


OF    AMERICA.  I95 

to  conclusively  presume  the  expectation  of  some 
other  pecuniary  advantage  in  addition  to  the  price 
paid. 

Second.  The  shares  must  have  been  of  such  a 
nature  as  that  their  ownership  would  create  in  the 
holder  a  corrupt  purpose  to  shape  legislation  in  the 
interest  of  the  seller. 

Third,  Some  distinct  and  specific  matter  or  thing 
to  be  brought  before  Congress,  and  on  which  the 
votes  and  decisions  of  members  are  sought  to  be 
influenced,  should  be  alleged  and  proved. 

It  is  by  no  means  clear,  from  the  testimony,  that 
the  stock  was  sold  at  a  price  less  than  its  true  value. 
It  was  not  on  the  market ;  it  had  no  market  value. 
Unlike  an  ordinary  marketable  commodity,  it  had 
no  current  price,  and  the  amount  for  which  it  could 
be  sold  depended  upon  the  temperament  of  the 
buyer,  and  his  inclination  to  assume  extraordinary 
risks  on  the  one  hand,  or  his  tendency  to  conserva- 
tive and  strictly  solid  investments  on  the  other.  It 
is  in  proof  before  a  committee  of  this  House,  by 
witnesses  largely  interested  in  railroad  construction 
and  operation,  and  of  great  financial  ability  and 
strength,  that  when  this  stock  was  offered  to  them 
at  par,  it  was  instantly  declined,  by  reason  of  the 
enormous  risks  involved  in  the  enterprises  on  which 
its  value  depended.  These  capitalists  believed  that 
all  the  capital  invested  in  the  stock  was  jeopardized, 
and  the  venture  was  declined  on  the  rule  that  no 
promise  of  profit  justifies  a  prudent  man  in  embark- 
ing in  any  enterprise  in  which  all  the  capital  invested 


196  THE    CREDIT    MOBILIER 

is  liable  to  be  sunk.  Apart  from  some  proof  that  a 
small  amount  of  this  stock  changed  hands  between 
persons  addicted  to  speculation,  at  about  one  hun- 
dred and  fifty,  nothing  is  shown  in  reference  to  its 
value,  except  that  it  was  not  on  the  market,  and  had 
no  ascertained  price.  To  overturn  the  presumption 
of  innocence  and  substitute  the  conclusive  imputa- 
tion of  guilt,  from  the  simple  fact  of  such  a  transac- 
tion occurring  between  men  who  had  long  main- 
tained the  most  friendly  personal  relations,  —  of 
whom  nothing  was  asked,  and  by  whom  nothing 
was  promised,  —  is  to  overturn  all  the  safeguards 
afforded  persons  and  property  by  the  common  law, 
and  in  lieu  thereof  establish  an  inquisitorial  code, 
under  which  no  man's  reputation  is  safe. 

It  has  been  assumed  that  the  ownership  of  Credit 
Mobilier  stock  necessarily  created  in  the  holder  a 
personal  and  pecuniary  interest  in  procuring  Con- 
gressional legislation  favorable  to  the  Union  Pacific 
Railroad  company,  or  preventing  legislation  ad- 
verse to  it.  At  the  date  of  the  alleged  distribution 
of  Credit  Mobilier  stock,  the  Oakes  Ames  contract 
had  been  made,  and  was  in  progress  of  execution. 
It  was  completed,  and  the  road  covered  by  the  con- 
tract turned  over  to  the  company  about  the  close  of 
the  year  1868.  Not  until  two  years  after  was  any 
legislation  asked  for  by  the  company,  and  then  it 
was  such  as  arose  out  of  exigencies  presented  by 
the  action  of  the  government  in  reversing  a  long- 
continued  and  uniform  previous  policy,  which  could 
not,    by    any    possibility,    have    been    foreseen    or 


OF    AMERICA.  I97 

anticipated.  The  stock  depended  for  its  value  upon 
the  connection  of  the  Credit  Mobilier  with  the  Oakes 
Ames  contract,  which  was  simply  in  the  capacity  of 
a  guarantor  of  its  execution,  whereby  a  certain  class 
of  its  stockholders  became  entitled  to  participate  in 
the  profits  of  that  contract  in  money.  There  is  no 
provision  of  the  Oakes  Ames  contract,  the  assign- 
ment thereof,  or  of  the  triplicate  agreement,  where- 
by a  stockholder  became  entitled  to  any  of  the  secu- 
rities of  the  Union  Pacific  Railroad  Company,  or  in 
any  way  interested  in  their  value.  The  profits 
derived,  if  an}-,  were  to  be,  and  were,  in  cash. 
When  the  Oakes  Ames  contract  was  completed, 
and  the  consideration  thereof  divided  in  cash  to  the 
several  parties  entitled,  in  due  proportion,  the  inter- 
est of  a  holder  of  Credit  Mobilier  stock  in  the  Union 
Pacific  Railroad  Company,  and  every  thing  pertain- 
ing to  it,  was  at  an  end.  In  other  words,  the  stipu- 
lations of  that  contract,  and  the  cash  profits  derivable 
therefrom,  were  the  end  and  the  beginning,  —  the 
centre  and  circumference, — the  absolute  measure  of 
the  pecuniary  interest  of  a  holder  of  Credit  Mobilier 
stock  in  1868.  To  say  that  the  Washburne  bill, 
which  professed  to  deal  exclusively  with  the 
operation  of  the  road,  in  the  hands  of  the  com- 
pany, after  it  had  been  built  and  turned  over  by 
the  contractors,  was  a  measure  feared,  and  to  pro- 
tect the  railroad  company,  against  which  the  stock 
in  question  was  sold  to  members  of  Congress, 
seems  to  me  to  invoke  the  last  extreme  of 
credulity. 


198  THE    CREDIT    MOBILIER 

It  is  impossible  to  impute  to  me  the  purpose  to 
corruptly  influence  members  of  Congress,  by  con- 
ferring upon  them  pecuniary  benefit  without  ade- 
quate consideration,  unless  the  benefit  conferred  is 
of  such  a  character  as  to  necessarily  create  an  incli- 
nation to  aid  the^  donor  to  the  detriment  of  the  public. 
There  is  but  one  escape  from  this  position,  and  that 
leads  to  a  lower  deep.  It  may  be  said  that  the  giv- 
ing by  any  person,  and  the  receiving  by  a  member 
of  Congress  of  any  gratuity  whatever,  or,  what  is 
identical  therewith,  selling  and  buying  at  an  inade- 
quate price,  imports  corruption  in  both  the  giver  and 
receiver,  the  buyer  and  seller.  Whoever  proclaims 
this  doctrine  should  instantly  set  on  foot  the  inquiry 
how  many  railroad  presidents  and  superintendents 
have  presented  to  members  of  Congress  the  value  of 
transportation  over  their  respective  railroad  lines, 
and  by  whom  the  same  has  been  received,  to  the  end 
that  justice  may  be  done,  and  the  one  presented  for 
indictment,  and  the  other  for  expulsion.  The  dimen- 
sions and  value  of  the  gratuity  have  nothing  to  do  with 
the  question.  There  is  no  middle  ground  on  which 
to  stand. 

For  the  first  time  in  the  history  of  any  tribunal, 
this  body  has  before  it  an  alleged  offender  without 
an  offense.  Any  person  accused  in  the  courts  of  the 
country,  under  like  circumstances,  might  well,  when 
called  upon  to  plead  to  the  indictment,  insist  that  it 
failed  to  charge  a  crime.  I  am  charged  by  the  com- 
mittee with  the  purpose  of  corrupting  certain  members 
of  Congress,  while  it,  at  the  same  time,  declares  said 


OF    AMERICA.  I99 

members  to  have  been  unconscious  of  my  purpose, 
and  fails  to  indicate  the  subject  of  the  corruption. 
In  other  words,  the  purpose  to  corrupt  is  inferred, 
where  the  effect  of  corrupting  could  not  by  possi- 
bility be  produced,  and  where  no  subject  for  corrup- 
tion existed.  No  lawyer  who  values  his  reputation 
will  assert  that  an  indictment  for  bribery  could  stand 
for  an  instant  in  a  common-law  court,  without  specifi- 
cally alleging  who  was  the  briber,  who  was  bribed, 
and  what  precise  measure,  matter,  or  thing  was  the 
subject  of  bribery.  There  can  be  no  attempt  to 
bribe  without  the  hope  and  purpose  of  corruptly 
influencing  some  person  or  persons  in  respect  to 
some  particular  act.  Until,  therefore,  it  is  alleged 
and  shown  not  only  who  tendered  a  bribe,  but  who 
accepted  or  refused  it,  and  what  was  the  specific 
subject-matter  of  the  bribery,  any  conviction  which 
may  follow  the  alleged  offense  must  rest  upon  the 
shifting  and  unstable  foundation  of  individual  caprice, 
and  not  upon  the  solid  rock  of  justice  administered 
under  the  restraints  of  law. 

I  shall  not  enter  upon  a  discussion  of  the  jurisdic- 
tion of  this  body  over  offenses  alleged  to  have  been 
committed  during  a  previous  Congress,  leaving  that 
question  for  such  additional  comment  as  the  lawyers 
of  the  House  choose  to  make.  '  The  position,  how- 
ever, that  the  fault  —  if  such  exists  —  is  a  continuing 
offense,  is  so  extraordinary,  and  fruitful  of  such  fatal 
consequences,  that  I  cannot  forbear  a  reference  to  it. 
Since  the  Credit  Mobilier  stock  sold  by  me  passed 
into  the  hands  of  the  several  members  of  Congress 


200  THE    CREDIT    MOBILIER 

referred  to  in  the  report,  I  have  been,  in  the  judg- 
ment of  the  committee,  a  perpetual  and  chronic 
offender  against  the  dignity  and  honor  of  the  House, 
and,  so  far  as  my  own  volition  is  concerned,  must  so 
continue  to  the  end  of  the  world.  So  long  as  a  single 
share  of  this  stock  shall  not  be  restored,  but  shall 
remain  in  the  hands  of  the  several  receivers,  or  either 
or  any  of  them,  my  offense  goes  on,  and  I  am  bereft 
of  the  power  to  stop  it.  And  yet,  notwithstanding  the 
world  is  now  apprised  of  my  alleged  corrupt  inten- 
tions—  and  no  member  of  Congress  can  be  ignorant 
of  them  —  the  parties  who  alone  have  the  power,  but 
fail  to  release  me  from  the  necessity  of  continuing 
my  offenses  by  return  of  the  stock,  are  themselves 
without  blame,  and  in  no  way  obnoxious  to  the  sins 
laid  upon  me.  The  committee  declare  that  want 
of  knowledge  alone  of  the  corrupt  intention  of  the 
seller  excused  the  buyer,  while  holding  and  owning 
the  proceeds  of  the  sale.  Now  that  such  knowledge 
is  everywhere  and  among  all  men,  how  can  this,  in 
the  absence  of  a  restoration  of  the  stock  or  its  pro- 
ceeds, be  a  living,  continuing,  perpetual  crime  in  the 
seller  and  not  in  the  buyer? 

I  beg  to  be  correctly  understood.  I  allege  nothing 
against  those  members  of  the  House  who  purchased 
Credit  Mobilier  stock.  I  am  simply  following  the 
reasoning  of  the  committee  to  its  logical  results.  I 
make  no  assault  upon  any  man  or  class  of  men  ;  but 
I  earnestly  protest  against  being  chosen  the  victim 
of  a  line  of  reasoning  and  assertion,  in  my  judg- 
ment  unjust,    partial,    unsound,    inconsistent,    and 


OF    AMERICA.  20I 

inconclusive,  —  calculated,  if  endorsed,  to  bring  this 
body  into  disrepute,  and  repugnant  to  the  sense  of 
justice  and  fair  play  embedded  in  the  hearts  of  the 
American  people. 

Reference  is  made  by  the  committee  to  the  act  of 
February  26,  1863,  and,  after  setting  out  the  same, 
the  following  language  is  used  : — "  In  the  judgment 
of  the  committee,  the  facts  reported  in  regard  to  Mr. 
Ames  and  Mr.  Brooks  would  have  justified  their 
conviction  under  the  above-recited  statute,  and  sub- 
jected them  to  the  penalties  therein  provided.  "  I 
beg  gentlemen  to  note  the  entire  section  carefully 
and  critically,  and  verify  the  assertion  I  now  make 
that  every  penalty  denounced  upon  him  who  shall 
"  promise,  offer,  or  give,  or  cause,  or  procure  to  be 
promised,  offered,  or  given,  "  *  *  *  "  any  valua- 
ble thing  "  *  *  *  "  to  any  member  of  Congress  " 
*  *  *  "  with  intent  to  influence  his  vote  on  any 
matter  pending  or  to  be  brought  before  him,  "  is 
alike  launched  with  impartial  severity  against  any 
member,  officer,  or  person  who  shall  in  anywise 
accept  or  receive  the  same,  not  knowingly ^  wilfully^ 
or /el 071  ion's ly  receive  the  same,  but  in  anywise 
accept  or  receive  the  same.  Mark  the  language  : 
"  And  the  member,  officer,  or  person  who  shall  in 
ANYWISE  accept  or  receive  the  same,  or  any  part 
thereof,  shall  be  liable  to  an  indictment  as  for  a  high 
crime  and  misdemeanor,  and  shall,  upon  conviction 
thereof,  be  fined  not  exceeding  ten  times  the  amount 
so  offered,  promised,  or  given,  and  imprisoned  in  a 
penetentiary  not  exceeding  ten  years.  " 


202  THE    CREDIT    MOBILIER 

Again  I  protest  against  the  conclusion  of  the  com- 
mittee, which  makes  this  unequal,  partial,  and  dis- 
criminating allotment  of  the  penalties  of  a  statute 
designed  by  its  framers  impartially  to  strike  or 
shelter  all  to  whom  it  applies.  Whatever  result  may 
be  reached  here,  none  can  doubt  that  in  the  courts 
of  the  country  there  will  be  one  law  for  all. 

Aside,  then,  from  the  letters  addressed  to  Mr. 
McComb,  it  is  impossible  to  infer  the  motives  attri- 
buted to  me  by  the  committee.  Mr.  McComb  claimed 
that  about  $20,000  of  the  $25,000  of  stock  voted  me 
to  fulfil  my  obligations  to  my  friends,  should  be 
given  to  him  for  distribution  to  his  friends,  and  the 
letters  to  him  were  written  to  show  that  I  was  selling 
the  stock  in  small  quantities  to  my  friends,  and  could 
not  give  his  friends  the  entire  amount  they  desired. 
A  perfect  understanding  of  the  circumstances  under 
which  these  letters  were  written,  and  a  candid 
consideration  of  their  object  and  purpose,  must,  I 
think,  carry  to  any  unbiased  mind  the  conviction  that 
my  motives  were  very  far  from  those  ascribed  to  me. 
Dr.  Durant,  Mr.  McComb,  and  myself,  were  each 
anxious  to  secure  as  large  a  portion  as  possible  of 
the  shares  of  Credit  Mobilier  stock,  and  professedly 
for  the  same  purpose ;  namely,  for  disposition  to 
those  persons  with  whom,  from  past  favors  or  per- 
sonal friendship,  we  were  willing  to  share  opportu- 
nities of  profitable  investment.  I  had  no  desire  or 
expectation  to  further  enrich  myself,  for  my  sole 
object  was  to  get  and  retain  as  much  of  this  stock 
as  possible,  to  be  used  in  redeeming  obligations  of 


OF   AMERICA.  203 

the  character  named.  These  obligations  had  been 
incurred  not  only  to  members  of  Congress,  but  to 
many  private  citizens  in  no  way  connected  with 
official  life ;  they  had  been  contracted  early  in  the 
year  1867,  when  the  stock  could  not  be  sold  above 
par,  and  it  was  to  meet  these  contracts  that  I  made 
special  efforts  to  obtain  the  stock.  In  doing  so,  I 
took  it,  not  for  my  individual  use,  but  as  trustee,  for 
the  sole  purpose  of  conveying  it  to  the  parties  entitled, 
and  it  would  have  been  a  breach  of  faith  in  me  to 
have  asked  or  taken  a  price  in  excess  of  the  par 
value,  notwithstanding  it  may  have  in  the  meantime 
advanced.  No  distinction  was  made  between  mem- 
bers of  Congress  and  unofficial  friends,  and  in  per- 
forming the  obligations  I  had  incurred,  I  sold  to  both 
alike  stock  at  its  par  value,  in  accordance  with  my 
agreement.  When,  therefore,  Mr.  McComb  objected 
to  my  receiving  so  large  an  amount,  and  entered 
upon  a  struggle  to  prevent  it,  I  naturally  addressed 
to  him  such  arguments  and  considerations  as,  in  m}'- 
judgment,  would  make  the  deepest  impression  upon 
his  mind.  It  so  happened  that,  in  the  prosperity 
and  success  of  the  Union  Pacific  Railroad  Company, 
Mr.  McComb  and  myself  had  a  common  and  identi- 
cal interest ;  and  I  therefore  urged  upon  him  that 
I  had  so  disposed  of  the  stock  as  to  enhance  the 
general  strength  and  influence  of  the  company,  for 
whose  welfare  his  solicitude  was  not  less  than  my 
own.  It  is  no  sufficient  answer  to  this  to  say  that 
the  statement  contained  in  the  letters  on  which  I 
most  relied  to  influence  his   mind,  I   now  concede 


204  THE    CREDIT    MOBILIER 

contained  expressions  liable  to  be  construed  against 
the  purity  of  my  motives.  Tried  by  the  test  of  casual 
and  confidential  letters,  often  written  hastily,  and 
under  circumstances  and  surroundings  entirel}^  dif- 
ferent from  those  in  the  light  of  which  they  are 
interpreted  ^framed  for  a  specific  purpose,  and  to 
accomplish  a  particular  end — their  collateral  and 
incidental  bearings  not  reflected  upon  and  deliber- 
ately weighed,  but  flung  off  hastily  in  the  instant 
press  of  business,  and  the  freedom  of  that  personal 
confidence  ordinarily  existing  between  parties  jointly 
concerned  in  financial  schemes  or  enterprises  of 
public  improvement,  he  would  indeed  be  a  cautious, 
a  prudent,  a  wise,  and  almost  perfect  man,  who  could 
emerge  from  such  an  ordeal  completely  free  from  the 
suspicion  of  fault. 

I  wish,  therefore,  to  declare,  in  the  broadest  sense 
of  which  language  is  capable,  that  in  writing  the 
McComb  letters,  I  had  alone  in  view  the  objects 
above  enumerated ;  that  I  never  for  an  instant 
imagined  that  from  them  could  be  extracted  proof 
of  the  motive  and  purpose  of  corrupting  members  of 
Congress  —  motives  and  purposes  which  I  solemnly 
declare  I  never  entertained.  The  insignificant 
amounts  of  stock  sold  to  each  member  with  whom  I 
had  dealings ;  the  proven  fact  that  I  never  urged  its 
purchase,  and  the  entire  lack  of  secrecy  —  ordinarily 
the  badge  of  evil  purposes  —  in  these  transactions, 
ought,  in  my  judgment,  to  stand  as  a  conclusive  refu- 
tation of  the  ofiences  charged.  And  above  and 
beyond  this,  I  submit  that  a  long  and  busy  life  spent 


OF    AMERICA.  205 

in  the  prosecution  of  business  pursuits,  honorable  to 
myself  and  useful  to  mankind,  and  a  reputation 
hitherto  without  stain,  should  of  its  weight  overcome 
and  outweigh  charges  solely  upheld  by  the  uncon- 
sidered and  unguarded  utterances  of  confidential 
business  communications. 

A  vast  amount  of  error  has  been  disseminated  and 
prejudice  aroused  in  the  minds  of  many  by  incorrect 
and  extravagant  statements  of  the  profits  accruing 
from  the  difierent  contracts  for  the  construction  of 
the  road,  and  especially  that  commonly  known  as 
the  Oakes  Ames  contract.  The  risk,  the  state  of 
the  country,  the  natural  obstacles,  the  inflation  of 
the  currency  and  consequent  exorbitant  prices  of 
labor  and  material,  the  Indian  perils,  the  unparal- 
leled speed  of  construction,  and  the  clamorous  de- 
mands of  the  country  for  speedy  completion,  seem 
to  be  forgotten,  and  the  parties  connected  with  the 
Credit  Mobilier  and  the  construction  of  the  road  are 
now  to  be  tried  by  a  standard  foreign  to  the  time 
and  circumstances  under  which  the  work  was  done. 
It  is  said  that  when  the  failure  to  secure  the  neces- 
sary amount  of  cash  subscriptions  to  the  stock  was 
proved,  and  it  became  manifest  that  the  only  medium 
through  which  the  work  could  go  on  was  by  a  con- 
structing company,  which  would  undertake  to  build 
the  road  and  take  the  securities  and  stock  of  the 
company  in  payment — when  the  whole  enterprise  had 
come  to  a  complete  halt,  and  was  set  in  motion  by  my 
individual  credit  and  means,  and  that  of  my  associ- 
ates—  the  enterprise  should  have  been  abandoned. 


206  THE    CREDIT    MOBILIER 

Were  it  possible  to  present  that  question  to  the 
same  public  sentiment,  the  same  state  of  national 
opinion,  which  existed  at  the  time  the  exigency 
arose,  I  would  willingly  and  gladly  go  to  Congress 
and  the  country  on  that  issue.  But  I  am  denied  that 
justice,  and  the  motives  and  transactions  of  one 
period  are  to  be  judged  by  the  prejudices  of  another, 
at  an  hour  when  the  fluctuations  of  opinion  are  ex- 
treme and  violent,  beyond  the  experience  of  former 
times.  The  actual  cost,  in  money,  of  building  the 
road  was  about  seventy  millions  of  dollars,  and  all 
statements  of  a  less  cost  are  based  upon  mere  esti- 
mates of  engineers  who  never  saw  the  work,  and 
utterly  fail  to  grasp  the  conditions  under  which  it 
was  prosecuted.  The  actual  profit  on  this  expendi- 
ture, estimating  the  securities  and  stock  at  their 
market  value  when  received  in  payment,  was  less 
than  ten  millions  of  dollars,  as  can  be  demonstrably 
established  in  any  court.  It  is  in  testimony  before  a 
committee  of  the  House,  by  witnesses  who  have 
spent  their  lives  as  contractors,  as  well  as  those  who 
have  been  builders,  owners,  and  operators  of  some 
of  the  great  trunk  lines  of  the  country,  that  for 
twenty  years  past  the  ordinary  method  of  building 
railroads  has  been  through  the  medium  of  construc- 
ting companies  ;  that  few,  if  any,  roads  involving  a 
large  outlay  of  capital  are  built  in  any  other  way  ; 
that  a  profit  of  from  twenty  to  thirty  per  cent,  is  not 
unreasonable  in  any  case,  and  that  upon  the  con- 
struction of  the  Union  Pacific  railroad,  estimating 
it  with  reference  to  the  magnitude  of  the  work  and 


OF   AMERICA.  207 

the  risk  incurred,  no  man  could  reasonably  object  to 
a  profit  of  fifty  per  cent.  The  like  evidence  is  given 
by  a  government  director,  long  intimately  acquainted 
with  the  manifold  difficulties  and  embarrassments 
encountered,  and  who  has  not  yet  outlived  the  recol- 
lection and  realization  of  them. 

So  far  as  I  am  pecuniarily  concerned,  it  would 
have  been  better  that  I  had  never  heard  of  the  Union 
Pacific  railroad.  At  its  completion  the  company 
found  itself  in  debt  about  six  millions  of  dollars,  the 
burden  of  which  fell  upon  individuals,  myself  among 
others.  The  assumption  of  the  large  portion  of  this 
liability  allotted  to  me,  followed  by  others  necessary 
to  keep  the  road  in  operation  until  there  should  be 
developed  in  the  inhospitable  region  through  which 
it  runs  a  business  affording  revenue  sufficient  to  meet 
running  expenses  and  interest,  finally  culminated  in 
events  familiar  to  the  public,  whereby  losses  were 
incurred  greatly  in  excess  of  all  profit  derived  by 
me  from  the  construction  of  the  road. 

What  then  has  the  government  received  as  the 
fruits  of  the  connection  of  the  Credit  Mobilier  with 
the  Union  Pacific  Railroad  Company,  and  the  trans- 
actions now  ,  under  consideration  ?  By  the  terms  of 
its  charter  it  agreed,  among  other  things,  to  loan  the 
company  for  thirty  years  its  bonds  to  certain  amounts 
per  mile,  and  until  their  maturity  one-half  the  earn- 
ings on  account  of  government  transportation  should 
be  retained,  to  be  applied  in  repayment  to  the  gov- 
ernment of  whatever  interest  might  in  the  mean- 
time be  paid  on  the  bonds  by  the  United   States. 


208  THE    CREDIT    MOBILIER 

The  company  in  turn,  by  acceptance  of  the  charter, 
agreed  to  pay  the  United  States  the  amount  due  on 
the  bonds  at  their  maturity,  and  to  perform  certain 
services.  Without  asking  additional  legislation,  or 
being  called  upon  to  resist  obnoxious  legislation, 
except  wherein  this  contract  had  been  disregarded 
and  ignored  by  the  government,  the  road  has  been 
completed  and  successfully  operated  throughout  its 
entire  line  now  nearly  four  years. 

No  complaint  has  ever  come  up  from  any  quarter 
of  any  failure  to  faithfully  perform  its  obligations  to 
the  government,  both  in  respect  to  transportation 
services  and  its  pecuniary  obligations.  In  the  only 
instance  in  which  it  has  differed  from  any  depart- 
ment of  the  government,  the  variance  has  been  upon 
a  purely  judicial  question,  upon  which  the  courts 
have  been  open  to  the  United  States,  but  closed  to 
us.  The  government  made  itself  the  creditor  of  the 
Union  Pacific  Company,  tying  its  debtor  hand  and 
foot  with  a  multiplicity  of  stipulations,  and  then  re- 
fused to  submit  their  interpretation  to  its  own  courts. 
That  it  has  so  far  reaped  the  principal  benefit  of  the 
bargain  cannot  be  denied.  Official  statements  of 
the  postmaster-general  are  before  the  House,  which 
show  that  for  the  six  years  ending  June  30,  1872, 
the  saving  to  the  government  upon  the  transportation 
of  postal  matter  alone  by  reason  of  the  construction 
of  the  Union  Pacific  railroad,  assuming  the  amount 
carried  to  be  equal  to  that  transported  previous  to  its 
construction,  has  been  $643,579.55.  But  the  amount 
of  postal  matter  has  been  over  six  times  greater  by 


OF   AMERICA.  209 

rail  than  by  stage,  so  that  the  real  saving  is  not  less 
than  $3,861,477.30.  Even  this  result  fails  to  repre- 
sent the  increased  speed  of  carriage  and  convenience 
of  handling  and  distribution  afforded  by  postal  cars 
to  the  employees  of  the  department  accompanying 
the  mails,  thus  insuring  safety  and  regularity  in  de- 
livery. A  like  statement  from  the  war  department 
shows  the  saving  upon  military  transportation  for 
the  same  time  to  have  been  $6,507,282.85.  No 
official  estimates  are  before  the  House  for  the  saving 
upon  transportation  of  Indian  goods,  for  the  navy 
department,  or  of  coin  or  currency,  but  they  may 
be  safely  aggregated  at  not  less  than  $2,500,000. 
This  gives  a  total  saving  for  the  six  years  ending 
June  30,  1872,  of  the  sum  of  $12,868,760.15.  The 
Secretary  of  the  Treasury  in  a  communication  to 
the  House,  bearing  date  May  20,  1872,  in  answer 
to  a  resolution  calling  for  such  information,  esti- 
mates the  amount  of  interest  and  principal  which 
will  be  due  from  the  Union  Pacific  Railroad  Com- 
pany, at  the  maturity  of  the  government  bonds, 
at  the  present  rate  of  payment,  at  $58,156,746.98. 
Assuming  that  the  saving  to  the  government  of  all 
the  different  classes  of  transportation  in  the  future 
will  be  the  same  as  in  the  past  (a  supposition 
entirely  on  the  side  of  the  United  States,  for  it 
will  in  fact  increase  in  almost  geometrical  progres- 
sion), and  the  result  is  a  total  saving,  at  the  date  of 
the  maturity  of  the  bonds  of  $64,343,880.75,  a  sum 
in  excess  of  the  principal  and  interest  due  at  that 
time    to    the    amount   of    $6,187,053.77.     In    other 


2IO  THE    CREDIT    MOBILIER 

words,  if  at  the  maturity  of  the  bonds  not  one  cent  of 
interest  or  principal  was  paid,  but  on  the  other  hand 
was  entirely  lost,  the  government  would  be  the 
gainer  in  money  to  the  amount  of  $6,187,053.77. 

All  this  is  solid  gain,  involving  no  consequential 
element,  and  susceptible  of  exact  computation.  To 
attempt  to  grasp  the  national  benefits  which  lie  out- 
side the  domain  of  figures,  but  are  embodied  in  the 
increased  prosperity,  wealth,  population,  and  power 
of  the  nation,  overtasks  the  most  vivid  imagination. 
When  the  rails  were  joined  on  Promontory  Summit, 
May  10,  1869,  the  Pacific  and  the  Atlantic,  Europe 
and  Asia,  the  East  and  the  West,  pledged  them- 
selves to  that  perpetual  amity  out  of  which  should 
spring  an  interchange  of  the  most  precious  and 
costly  commodities  known  to  traffic,  thus  assuring  a 
commerce  whose  tide  should  ebb  to  and  fro  across 
the  continent  by  this  route  for  ages  to  come.  Utah- 
was  then  an  isolated  community,  with  no  industry 
but  agriculture,  and  those  manufactures  necessary  to 
a  poor  and  frugal  people.  In  1872  it  shipped  ten 
millions  of  silver  to  the  money  centres  of  the  world, 
and  is  now  demonstrated  to  be  the  richest  mineral 
storehouse  on  the  continent.  An  institution  repug- 
nant to  the  moral  sense  of  the  Christian  world  is  fast 
yielding  to  the  civilizing  contact  of  the  outer  travel 
made  possible  by  the  construction  of  the  railway. 
Many  believe  it  has  already  substantially  solved  the 
perplexing  problem  of  potygamy.  A  vast  foreign 
immigration,  bringing  with  it  from  Europe  an  immense 
aggregate  sum  of  money,  has  already  been  distributed 


OF   AMERICA.  211 

far  out  on  the  line  of  the  road,  and  its  means  and 
muscle  are  fast  subjecting  the  lately  sparsely-peopled 
territories  of  Colorado,  Wyoming,  Montana,  and 
Idaho  to  the  uses  of  an  enterprising  and  rapidly- 
increasing  population.  A  steady  and  copious  flow  of 
British  capital  is  pouring  into  the  mines  of  Colorado 
and  Utah.  The  Indians  have  been  pacified ;  fruit- 
less and  costly  hostile  military  expeditions,  frequent 
elsewhere,  have  ceased  in  the  vicinity  of  its  line, 
and  the  facility  and  speed  of  communication  aflbrded 
by  the  railroad  enables  the  government  to  ofler  ade- 
quate protection  to  the  frontier  with  a  handful  of 
troops,  and  at  the  same  time  dispense  with  large 
garrisons  and  fortified  posts,  hitherto  maintained  at 
fabulous  cost.  The  countless  herds  of  Texas  are 
moving  up  to  occupy  the  grazing  grounds  of  the 
butlalo  in  the  valleys  and  canons  shadowed  by  the 
Rocky  Mountains.  A  region  of  boundless  natural 
resources,  lately  unknown,  unexplored,  and  unin- 
habited, dominated  by  savages,  has  been  reclaimed, 
hundreds  of  millions  added  to  the  wealth  of  the 
nation,  and  the  bonds  of  fraternal  and  commercial 
union  between  the  East  and  West  strengthened 
beyond  the  power  of  civil  discord  to  sever. 

Does  any  one — yearning  with  solicitude  lest  the 
United  States,  which  has  made  this  fortunate  bar- 
gain, should  fail  to  receive  each  cent  due  at  the 
precise  moment  it  may  be  demanded  by  its  oflicers  — 
doubt  the  ability  of  the  company  to  perform  its  obli- 
gations and  pay  the  last  dollar  due,  long  before  the 
maturity  of  the  bonds?     Four  years  ago  the  road 


212  THE    CREDIT    MOBILIER 

was  opened,  without  local  business,  with  no  consid- 
erable through  traffic,  and  in  the  dawn  of  the 
friendly  relations  between  the  United  States  and 
those  Asiatic  nations  which  now  bid  fair  to  prove 
the  source  of  its  largest  and  most  lucrative  business. 
The  conservative  capitalists  of  the  country  believed 
it  would  bankrupt  any  organization  which  undertook 
to  operate  it.  Four  years  have  reversed  that  opinion, 
and  now  the  same  men  are  putting  forth  their  best 
efforts  to  secure  the  benefit  of  a  close  traffic-connec- 
tion, and  perhaps  ultimate  ownership.  Twenty-four 
years  ago  there  was  scarcely  a  mile  of  railroad  west 
of  Lake  Erie,  and  no  connecting  line  west  of  Buf- 
falo. Let  him  who  would  rightly  estimate  the  future 
of  this  company  go  back  to  the  year  1848,  and 
thence  forward  to  the  present  time,  trace  the  growth 
and  development  of  that  portion  of  the  United  States 
lying  west  of  the  great  lakes,  and  he  will  be  able  to 
approximate  the  coming  history  of  the  region  through 
which  this  road  stretches  for  a  thousand  miles,  and 
of  the  trade  and  products  and  commodities  of  which 
it  is  to  be  the  great  commercial  artery.  There  is 
but  one  power  that  can  destroy  its  ability  to  perform 
all  its  obligations  to  the  government ;  there  is  but 
one  agency  that  can  render  it  incapable  of  paying 
all  its  indebtedness,  to  the  last  dollar,  namely,  the 
Congress  of  the  United  States.  It  alone  can  so 
cripple,  weaken,  or  destroy  the  company  as  to  make 
the  loan  of  the  government  to  it  a  total  loss. 

These,  then,  are  my  offences  :  that  I  have  risked 
reputation,  fortune,  everything,  in  an  enterprise  of 


OF   AMERICA.  213 

incalculable  benefit  to  the  government,  from  which 
the  capital  of  the  world  shrank ;  that  I  have  sought 
to  strengthen  the  work,  thus  rashly  undertaken,  by 
invoking  the  charitable  judgment  of  the  public  upon 
its  obstacles  and  embarrassments ;  that  I  have  had 
friends,  some  of  them  in  official  life,  with  whom  I 
have  been  willing  to  share  advantageous  opportuni- 
ties of  investment ;  that  I  have  kept  to  the  truth 
through  good  and  evil  report,  denying  nothing,  con- 
cealing nothing,  reserving  nothing.  Who  will  say 
that  I  alone  am  to  be  offered  up  a  sacrifice  to  ap- 
pease a  public  clamor  or  expiate  the  sins  of  others? 
Not  until  such  an  offering  is  made  will  I  believe  it 
possible.  But  if  this  body  shall  so  order  that  it  can 
best  be  purified  by  the  choice  of  a  single  victim,  I 
shall  accept  its  mandate,  appealing  with  unfaltering 
confidence  to  the  impartial  verdict  of  history  for  that 
vindication  which  it  is  proposed  to  deny  me  here. 


if 


X. 

THE     VOTE     OF    CENSURE. 

TN  consequence  of  the  report  of  the  Judiciary  com- 
•*'  mittee  already  alhided  to,  and  a  feeling  on  the 
part  of  many  members  that  the  evidence  would  not 
warrant  the  conviction,  it  was  growing  apparent  that 
the  report  of  the  committee  would  not  be  sustained, 
and  that  the  expulsion  of  these  members  would  not 
follow.  Mr.  Sargent,  of  California,  moved  to  sub- 
stitute for  the  resolutions  offered  by  the  committee, 
the  following :  — 

Whereas^  by  the  report  of  the  special  committee  herein, 
it  appears  that  the  acts  charged  against  members  of  this 
House  in  connection  with  the  Credit  Mobilier  of  America, 
occurred  more  than  five  years  ago,  and  long  before  the 
election  of  such  persons  to  this  Congress,  two  elections  by 
the  people  having  intervened  ;  and,  whereas  grave  doubts 
exist  as  to  the  rightful  exercise  by  this  House  of  its  power 
to  expel  a  member  for  offenses  committed  by  such  mem- 
ber long  before  his  election  thereto,  and  not  connected 
-with  such  election  :  therefore. 

Resolved^  That  the  special  committee  be  discharged 
from  the  further  consideration  of  this  subject. 

Resolved^  That  the  House  absolutely  condemns  the 
conduct  of  Oakes  Ames,  a  member  of  this  House  from 

214 


THE    CREDIT    MOBILIER.  215 

Massachusetts,  in  seeking  to  procure  Congressional  atten- 
tion to  the  affairs  of  a  corporation  in  which  he  was  inter- 
ested, and  whose  interest  directly  depended  upon  the 
legislation  of  Congress,  by  inducing  members  of  Congress 
to  invest  in  the  stocks  of  said  corporation. 

Resolved^  That  this  House  absolutely  condemns  the 
conduct  of  James  Brooks,  a  member  of  this  House  from 
New  York,  for  the  use  of  his  position  as  government 
director  of  the  Union  Pacific  Railroad,  and  a  member  of 
this  House,  to  procure  the  assignment  to  himself  or  family, 
of  stock  in  the  Credit  Mobilier  of  America,  a  corporation 
having  a  contract  with  the  Union  Pacific  railroad,  and 
whose  interests  depended  directly  upon  the  legislation  of 
Congress. 

On  this  motion  to  substitute,  the  yeas  and  nays 
were  called,  and  with  the  following  result.  Yeas, 
115;  nays,  no;  not  voting,  15.  So  it  was  agreed 
to  substitute  these  resolutions  for  those  offered  by 
the  committee. 

The  question  then  came  upon  the  resolution  con- 
demning the  action  of  Oakes  Ames,  and  it  was 
agreed  to  by  a  vote  of  182  yeas,  '^6  nays,  22  not 
voting. 

Upon  the  resolution  condemning  the  action  of 
James  Brooks,  the  vote  stood :  174  yeas,  32  nays, 
34  not  voting. 

And  so  the  resolutions  were  each  agreed  to. 

During  these  proceedings  Mr.  Ames  occupied  a 
seat  on  the  floor  of  the  House,  immediately  in  front 
of  the  Speaker,  in  plain  view  of  all.  He  realized 
the  situation  in  which  he  was  placed,  and  felt  deeply, 
keenly,  the  disgrace  that  was  being  placed  upon 


2l6  THE    CREDIT    MOBILIER 

him.  He  sat  there  silent,  immovable,  a  deathly 
pallor  on  his  countenance,  calmly  waiting  for  the 
awful  decision.  Mr.  Brooks  occupied  his  own  seat, 
looking  more  like  a  corpse  than  a  human  being. 
Those  were  awful  moments  to  these  men,  as  name 
after  name  was  called  and  recorded  on  the  everlast- 
ing pages  of  history,  where  generations  yet  unborn 
might  come,  and,  reading,  point  the  finger  of  scorn 
at  those  names  thus  shrouded  in  eternal  infamy.  A 
whole  life  was  centered  in  those  few  moments.  All 
hope  was  lost,  all  honor  gone.  When  the  decision 
had  been  announced  and  the  awful  sentence  record- 
ed, there  "  ensued  upon  the  floor  of  Congress  a 
scene  without  parallel.  Men  who  had  just  joined  in 
the  vote  of  condemnation  against  Mr.  Ames,  gath- 
ered around  him  to  ask  his  pardon  for  having  done 
so.  They  said  to  him,  'we  know  that  you  are  inno- 
cent ;  but  we  had  to  do  it  in  order  to  satisfy  our 
constituents.'" 

This  scene  is  a  fact,  and  the  names  of  those  who 
thus  spoke  can  be  given.  What  virtuous  men  to  sit 
in  judgment  upon  their  fellow-men  !  How  noble  the 
hearts  that  could  thus  consign  to  infamy  a  fellow 
being  !  Years  after,  others  have  confessed  their  vote 
was  given  as  it  was  solely  on  account  of  personal 
hopes.  It  presents  a  picture  of  depravity  by  the  side 
of  which  all  the  acts  charged  against  Oakes  Ames 
stand  out  as  honorable  in  the  extreme. 

Congress  soon  adjourned,  and  the  terms  of  service 
of  Oakes  Ames  and  James  Brooks  were  at  an  end. 
They  returned  to  their  respective  homes  only  to  die. 


OF    AMERICA. 


217 


In  a  few  weeks  they  were  no  more.     The  people 
of  the  whole  nation  soon  began  to  realize  that  in  the 
death  of  Mr.  Ames  the  country  had  lost  a  great  ben- 
efactor—  a  man  through  whose  instrumentality  the 
greatest  achievement  of  the  present  age  had  been 
successfully  completed.     There  is  no  doubt  but  the 
disgrace    thus    placed    upon    him    ended    his    life. 
Whatever   opinion    the   world    at   large    may    have 
entertained    of    the    man,    however   deep    was   the 
feeling  agaihst  him  in  general,  those  who  knew  him, 
and  who  had  been  associated  with  him,  could  not 
be  made  to  believe  that  dishonor  or  guilt  had  ever 
lurked  within  his  heart.     In  all  his  private  relations 
his  name  was  pure  and  spotless.     In  his  business 
his  honor  and  integrity  were  proverbial.     Still  he 
may  not  have  been  a  man  who  would  impress  those 
who  knew  him  not,  with  a  sense  of  his  greatness. 
That  was  reserved  for  those  who  could  become  inti- 
mate with  him,  and  understand  him.     He  was  not 
given  to  niceties,  or  to  small  matters.    He  might  not 
be  able  to  discern  fine-drawn  distinctions,  but  his 
mind  was  comprehensive  enough  to  grasp  the  most 
gigantic  schemes,  and  understand  them.     To  him 
the  success  of  the  Pacific  road  was  beyond  doubting. 
He  believed  it,  and  he  was  willing  to  risk  his  entire 
fortune  —  as,   in  fact,   he   did — in   its   construction. 
He    beheld    the   vast    benefit   it   would   be   to   the 
country,  and  he  saw  the  stream  of  commerce  that 
was  to  roll  on  forever  over  its  line.     He  saw  the 
unity  it  would  establish  between  all  sections  of  the 
country,  and  comprehended  the  patriotic  influence  it 


2l8  THE    CREDIT    MOBILIER 

would  ever  exert.  He  became  interested  in  the 
Pacific  road  at  a  critical  hour  of  its  fortunes,  and  he 
gave  it  his  means,  his  energy,  his  life. 

While  we  cannot  say  that  he  was  insensible  to 
gain,  still  those  who  knew  him  best  can  never  be 
made  to  doubt  that  there  was  a  large  element  of 
patriotism  in  the  views  which  induced  him  to  take 
the  position  he  did  in  constructing  this  great  high- 
way from  the  river,  through  the  wilderness,  and 
over  the  mountains  to  the  ocean.  His  work  was 
finished  in  the  same  spirit  in  which  he  worked  all 
through  his  connection  with  it ;  and  at  the  time  when 
he  ought  to  have  received  his  reward,  when  he 
should  have  been  entitled  to  a  life  of  honor  and 
ease,  he  found  himself  assailed  in  the  most  most 
wanton  manner,  and  his  name  and  fame  forever 
tarnished. 

When  he  returned  from  Washington,  at  the  close 
of  his  Congressional  labors,  he  was  met  by  the 
citizens  of  his  home  with  a  demonstration  which 
showed  their  absolute  confidence  in  his  honor,  and 
they  gave  expression  of  their  love  for  him  in  a 
manner  that  was  most  impressive.  Two  months 
later  they  followed  him  to  his  grave  and  wept  over 
his  remains. 

The  flight  of  time  has  not  failed  to  bring  back 
to  the  memory  of  Oakes  Ames  the  vindication  that 
was  denied  him  on  the  floor  of  Congress.  Every 
position  which  he  took  regarding  the  Credit  Mobilier 
or  the  Union  Pacific  road  has  been  sustained  when- 
ever brought  before  our  tribunals  of  justice.     The 


OF    AMERICA.  219 

anticipations  and  predictions  of  the  future  of  that 
road  have  been  fulfilled.  It  has  proven  a  success 
in  every  way,  and  the  country  through  which  it 
was  built  has  been  developed  beyond  the  wildest 
prophecies. 

The  stockholders  of  the  Union  Pacific  road  have 
lately  erected  a  monument  to  the  memory  of  Oakes 
and  Oliver  Ames,  on  the  highest  ground  between 
the  Atlantic  and  Pacific  slopes  crossed  by  the  road. 
While  the  road  itself  is  the  grandest  monument  that 
could  be  erected  to  the  memory  of  any  man,  it  is  but 
appropriate  that  this  outward  sign  should  be  made 
as  a  further  evidence  of  the  appreciation  of  their 
business  enterprise  and  sagacity,  and  their  great 
merit.  There  may  it  ever  stand,  overlooking  the 
work  they  carried  through ;  and  those  who  journey 
over  the  road  cannot  avoid  the  feeling  that  this  is 
but  a  just  recognition  for  their  services ;  and  when 
the  whole  of  this  great  struggle  shall  have  become 
fully  known,  no  doubt  can  longer  exist  as  to  the 
loyalty  of  their  motives  and  actions. 


XI. 
THE   CREDIT  MOBILIER   OF   TO-DAT, 

T^  ROM  this  time  forward  the  Credit  Mobilier  has 
-*-  lived  only  in  history.  The  work  which  it  was 
commissioned  to  do  had  been  completed  —  at  the 
date  of  this  vote  of  censure,  three  years — and  since 
then  has  never  been  heard  of,  save  as  spoken  of  in 
connection  with  this  last  disgraceful  scene  in  its  his- 
tory. Why  did  it  assume  so  great  importance  ?  What 
were  the  causes  which  brought  it  forth  so  promi- 
nently? These  causes  have  already  been  alluded  to, 
viz.,  the  political  influence  that  could  be  created  by 
and  through  it.  Undoubtedly  had  its  purposes,  its 
objects,  its  work  been  understood  and  appreciated,  it 
would  never  have  been  heard  of  after  its  work  was 
finished.  There  is  an  element  in  the  politics  of  all 
countries  which  will  grasp  every  incident  that  will 
tend  to  inflame  with  prejudice  the  minds  of  the  peo- 
ple against  any  party  or  any  individual.  Party  suc- 
cess overcomes  and  controls  the  judgment  of  party 
advocates,  and  those  events  which  in  themselves 
may  be  pure  and  innocent,  are  distorted  and  made 
to  appear  impure  and  corrupt.  Our  own  country  is 
certainly  no   exception  to   this    spirit.     Our   party 


THE    CREDIT    MOBILIER.  221 

leaders  are  not  opponents  to  the  rule  that  success 
will  justify  any  means  used  to  attain  it.  Party  feeling 
runs  high  in  our  land,  and  the  advantages  offered  to 
party  leaders  to  prejudice  public  opinion  are  singu- 
larly attractive,  for  in  the  hands  of  the  people  lie  all 
power,  and  upon  them  rests  the  entire  responsibility 
of  good  government.  The  jealous  care  with  which 
our  liberties  have  been  governed,  the  deep  love  that 
has  been  instilled  within  our  hearts  for  our  institu- 
tions, and  the  patriotic  desire  of  every  American  to 
see  those  liberties  sustained,  those  institutions  per- 
petuated, oftentimes  make  us  forget  to  examine  into 
the  merits  of  the  arguments  presented,  and  we  con- 
demn where  we  should  praise,  and  praise  where  we 
should  condemn.  We  do  not  stop  to  consider  con- 
sequences, but  too  oft  imbibe  within  us  the  very  feel- 
ings of  prejudice  which  are  thrown  in  our  way.  We 
see  an  action  which  appears  to  be  born  of  corrup- 
tion, or  to  hold  within  its  hands  elements  of  evil, 
and  straightway  we  condemn,  never  stopping  to  look 
at  its  real  work  or  object,  never  considering  whether 
or  not  that  very  appearance  is  not  artificial,  and  has 
been  pictured  to  us,  by  skilful  partisans,  for  no  other 
purpose  than  their  own  benefit  and  advantage.  No 
cry  in  all  our  country  has  so  powerful  an  effect  or 
exerts  so  great  an  influence  upon  public  opinion  as 
that  which  tells  us  our  liberties  are  in  danger  of 
being  destroyed  by  corruption  in  places  of  high  trust 
and  honor  in  our  national  councils.  So  it  was  when, 
in  the  excitement  of  a  presidential  campaign,  the  cry 
of  Credit  Mobilier  was  raised,  —  when  the  declaration 


222  THE    CREDIT    MOBILIER 

was  made  that  corruption  the  most  flagrant  had  been 
unearthed  among  the  members  of  Congress, — -when 
the  names  of  representatives  and  senators,  and  other 
high  officials,  were  given  to  the  country  as  those  who 
had  enriched  themselves  from  the  public  treasury 
and  had  used  their  positions  and  their  honor  for 
their  own  gain  ;  it  was  not  strange  that  the  whole 
country  should  be  aroused,  and  that  society  should 
be  stirred  to  its  very  foundation.  The  proof  pre- 
sented was  so  direct  and  strong  that  those  whose 
names  were  thus  paraded  before  the  country  dared 
not  face  the  storm  of  indignation,  and  knew  not 
how  to  explain  their  positions.  In  their  dilemma  they 
took  that  course  which  seemed  to  afford  the  easiest 
and  surest  escape,  and  denied  all  connection. 

Where  was  the  wrong?  where  was  the  guilt? 
The  people  could  not  understand ;  the  politicians 
themselves  did  not  comprehend  the  relation  of  the 
Credit  Mobilier,  or  if  comprehending  they  felt  un- 
able to  state  the  ease  so  that  the  people  should. be 
able  to  understand.  In  the  excitement  that  pre- 
vailed matters  became  so  complicated  that  when  the 
investigation  ended,  when  all  the  evidence  had  been 
collected,  every  one  seemed  more  in  doubt  than 
ever.  The  public  had  become  more  and  more  con- 
vinced that  the  government  had  been  defrauded,  and 
all  parties  and  classes  united  in  the  cry  for  the  pun- 
ishment of  the  guilty.  The  committees  of  investi- 
gation, in  view  of  all  this  cry  of  alarm,  became  so 
biased  that  they  were  impressed  in  the  same  man- 
ner, and  their  reports  were  written  more  to  appease 


OF    AMERICA.  223 

the  public,  and  insure  their  own  safety  and  continu- 
ance in  power,  than  to  arrive  at  exact  justice.  The 
recommendations  of  the  Polland  committee  were 
shown  and  proven  to  be  without  any  authority,  and 
that  expulsion,  under  the  circumstances,  would  be 
against  every  law  and  precedent  in  parliamentary 
history.  It  would  have  been  the  establishment  of  a 
precedent  so  wrong  and  unjust  that  there  would  be 
danger  of  its  overturning  the  very  foundations  of 
the  liberty  they  pretended  to  be  anxious  to  save. 
So  clear,  so  plain  were  the  objections  to  those 
recommendations  set  forth,  that  even  their  most  hot- 
headed advocate  held  back  in  fear,  and  as  a  last 
and  final  resort  the  vote  of  censure  was  substituted 
and  passed.  But  it  was  not  passed  because  it  was 
just  and  merited,  not  because  those  who  voted  upon 
it  believed  it  was  right,  but  because  the  cry  through- 
out the  country  was  for  some  sort  of  condemnation, 
and  those  men  dared  not  face  their  constituents 
with  any  other  record  of  their  votes.  No  doubt 
there  were  many  honest,  honorable  men  in  that 
body  who  voted  according  to  their  convictions,  who 
believed  that  censure  to  be  just,  and  thought  in  vot- 
ing it  that  they  were  doing  themselves  credit  and 
freeing  their  country  from  the  great  stain  of  dis- 
grace that  was  upon  it.  Yet  those  men  could  not 
have  had  an  opportunity  to  investigate  this  subject, 
did  not  understand  it,  and  from  the  reports  of  the 
committee  became  more  and  more  uncertain  regard- 
ing it ;  and  so,  taking  the  reasoning  of  the  committee 
in  all  their  false  positions  as  correct,  voted  as  they  did. 


224  THE    CREDIT   MOBILIER 

The  Wilson  committee  failed  utterly  and  com- 
pletely to  understand  the  relations  between  the 
Credit  Mobilier  and  the  Union  Pacific  road,  and 
between  that  road  and  the  government.  Their  con- 
clusions have  been  shown,  in  the  highest  court  of 
justice  in  our  land,  to  be  founded  in  error,  and  to 
be  absolutely  wrong.  The  Supreme  Court  of  the 
United  States  has  decided  that  the  government  was 
not  wronged ;  that  every  obligation  imposed  upon 
the  road  has  been  faithfully  performed ;  that  neither 
the  Credit  Mobilier  nor  the  trustees,  who  held  the 
contracts  for  building  the  road,  had  wronged  any 
one,  unless  it  might  be  some  bojia-Jidc  stockholder 
of  the  road,  who  took  no  part  in  its  construction,  and 
there  was  no  proof  or  evidence  of  such  holders. 
Common  sense  would  teach  us  that  the  government 
was  not  wronged,  when  we  consider  the  nature 
of  its  claim  upon  the  road.  Its  credit  alone  was 
loaned  ;  it  took  a  security  of  its  own  choosing  ;  and 
though  those  contractors  had  incurred  an  expense 
of  $500,000  per  mile  in  the  construction  of  the  road 
it  would  not  have  affected  the  security  of  the  gov- 
ernment. That  security  was  a  second  mortgage, 
subject  only  to  a  first  mortgage  of  the  same  amount. 
If  the  road  had  been  built  for  only  $50,000,000 — 
the  lowest  estimate  that  could  be  given  under  the 
most  favorable  circumstances,  and  the  amount  which 
the  Wilson  committee  erroneously  claim  as  its  actual 
cost — still  the  government's  security  would  have 
been  precisely  the  same,  a  second  mortgage  of  the 
same    amount    that   it    now   is,    subject    to    a    first 


OF   AMERICA.  225 

mortgage  of  the  same  amount.  Whatever  was  more 
than  this,  whatever  further  obligations  were  incurred, 
became  subordinate  to  the  claim  of  the  government, 
and  so  no  wrong  could  be  done  in  that  way.  The 
prejudice  of  the  past  has  cleared  away  to  such  an 
extent  that  the  people  can  be  brought  to  understand 
this ;  and  when  they  see  that  every  position  taken 
by  the  managers  of  the  Credit  Mobilier  has  been 
upheld  in  our  highest  courts  of  justice ;  when  they 
have  seen  that  every  prediction  of  the  Ameses 
regarding  the  prosperity  of  the  road  has  been  more 
than  fulfilled ;  when  they  see  that  the  loan  of  the 
government  will  be  paid  at  its  maturity  by  the  very 
means  provided  in  the  beginning ;  when  they  see 
the  extraordinary  advantages  that  have  come  to  the 
whole  country  through  the  building  of  that  road ; 
when  they  see  the  vast  volume  of  commerce  that 
rolls  along  from  the  Atlantic  to  the  Pacific,  then 
they  become  willing  to  listen  to  the  voice  of  reason, 
and  cast  aside  their  prejudices,  in  an  attempt 
to  understand  and  appreciate  all  that  has  been 
done. 

When,  also,  they  come  to  view,  with  impartial 
eyes,  the  connection  of  members  of  Congress  with 
the  Credit  Mobilier ;  when  they  comprehend  the 
circumstances  under  which  that  stock  was  held ; 
when  they  ascertain  that  there  was  not  then,  nor  for 
years  after,  any  legislation  before  Congress  affecting 
the  Pacific  roads,  that  no  further  legislation  was 
desired,  asked  for,  or  feared ;  when  they  consider 
that  the  contract,  under  which  profits  were  to  come, 


226  THE    CREDIT   MOBILIER 

if  come  at  all,  had  been  made,  and  was  being 
executed,  and  that  the  government  had  not  the 
right  to  violate  a  contract  legally  made,  as  the 
courts  have  decided  this  was ;  when  they  read  the 
conclusions  of  the  very  committee  who  charge 
bribery  that  no  one  had  been  bribed,  that  no  mem- 
ber had  been  influenced  in  his  actions  by  holding 
the  stock,  and  that  the  holding  of  the  stock  would 
not  even  have  a  tendency  to  create  an  interest  that 
would  influence  the  action  of  a  member  of  Congress  ; 
and  when  they  reflect  upon  the  extreme  littleness  of 
the  reputed  bribe,  and  its  insignificance  in  compar- 
ison with  the  risk  of  exposure,  how  can  any  other 
conclusion  be  reached  than  that  no  bribe  was  offered, 
no  bribe  accepted,  and  no  bribery  thought  of;  that 
members  of  Congress  not  only  held  the  stock,  but 
held  it  rightfully,  and  with  no  corrupting  influence 
connected  therewith. 

Then,  again,  when  looking  at  all  this,  when 
understanding  that  the  government  was  not,  could 
not,  be  wronged  by  the  action  of  the  Credit  Mobil- 
ier ;  when  they  understand  that  the  connection 
of  members  of  Congress  with  the  stock  was  honor- 
able and  right,  and  that  no  bribery  was  attempted, 
or  thought  of;  when  they  remember  that  the  sole 
charge  of  bribery  came  from  a  witness  whose 
testimony  was  shown,  by  the  most  conclusive  evi- 
dence, to  be  perjury  in  every  material  point,  how 
can  any  other  conclusion  be  held  than  that  Oakes 
Ames,  in  all  his  acts,  was  a  conscientious  and  an 
honest  man,   and  that  the  vote  of  censure  passed 


OF    AMERICA.  227 

upon  him  was  the  most  unjust  and  shameful  event 
in  the  whole  history  of  Congress. 

How  all  this  might  have  been  avoided  had  men 
been  truthful !  No  stain  rests  upon  those  who 
came  forward  and  acknowledged  their  owning  the 
stock.  The  names  of  Dawes,  and  Henry  Wilson, 
and  Logan,  and  Bingham,  and  John  F.  Wilson,  and 
others  like  them,  are  pure  and  unspotted,  and  no 
thought  is  ever  given  them  in  that  respect.  The 
people  still  honor  them ;  those  living  are  entrusted 
with  high  office ;  those  dead  have  their  memory 
enshrined  in  the  hearts  of  the  people.  To  Brooks, 
and  Patterson,  and  Colfax,  the  finger  of  scorn  is 
ever  held,  because  they  denied  the  truth,  and  their 
word  was  proven  false.  They  have  sunk  into  a 
political  grave,  never  again  to  be  trusted  with  places 
of  honor,  or  to  have  their  memories,  when  dead, 
consecrated  in  the  hearts  of  their  countrymen.  In 
this  same  list  would  be  classed  the  name  of 
Garfield,  had  he  not,  after  he  had  been  cowardly 
enough  to  falsify  his  word,  and  attempt  to  blacken 
the  name  of  his  associate  and  friend,  and  after  he 
found  his  word  was  proven  false,  by  evidence  too 
strong  to  be  overcome,  had  the  wisdom  to  hold  his 
tongue,  and  let  the  whole  matter  rest  in  quietness, 
feeling  sure  that  if  no  further  notice  was  taken  of  it, 
time  would  lead  to  its  being  forgotten. 

The  Credit  Mobilier  is  still  an  organization.  Its 
charter  is  still  in  force,  but  its  power  is  gone.  Its 
stock  is  being  gradually  absorbed  into  one  com- 
mon vortex,  so  that  now  only  about  one-fourth  is 


228  THE    CREDIT    MOBILIER 

outstanding.  There  are  some  questions  yet  remain- 
ing as  to  its  assets,  and  claims  have  been  made  against 
the  Union  Pacific  Railroad,  and  a  suit  is  now  pending 
in  the  courts  in  Boston  for  the  recovery  of  $2,000,000, 
which  the  Credit  Mobilier  claims  is  due  from  the 
road.  No  decision  has  been  reached,  and  nothing 
can  be  said  as  to  the  result.  Should  this  claim  be 
sustained,  the  stock  of  the  Credit  Mobilier  will  be  of 
value  ;  but,  as  is  more  than  probable,  if  this  suit 
should  be  decided  adverse  to  the  Credit  Mobilier,  its 
stock  will  be  of  no  value  whatever.  Its  existence 
thus  lies  upon  the  uncertain  decision  of  a  suit,  and  it 
is  more  than  likely  ere  another  year  shall  pass,  the 
Credit  Mobilier  will  be  among  the  organizations  of 
the  past.  Its  history  may  be  a  pleasant  and  interest- 
ing one  in  many  respects,  and  in  others  the  extreme 
opposite.  With  its  life  were  linked  the  fortunes  of 
many.  Perhaps  never  in  any  organization  of  equal 
capital  has  there  ever  been  associated  so  much 
wealth,  energy,  and  ability  as  in  this.  Its  managers 
were  at  all  times  men  of  the  most  extraordinary 
talents,  and  whose  names  have  almost  been  house- 
hold words  throughout  the  land.  Its  achievements 
have  been  the  most  wonderful  ever  seen  in  this 
country,  and  the  results  that  have  been  reached 
through  its  work,  have  done  more  to  build  up  the 
commerce  of  the  nation,  and  to  add  to  its  material 
wealth,  and  power,  and  strength,  than  any  other 
enterprise  since  our  history  began.  A  tract  of  land 
greater  than  that  of  most  of  the  empires  of  the  world, 
has  been  reclaimed  from  a  desert  waste,  and  made  a 


OF    AMERICA, 


229 


fertile  valley,  wherein  may  be  grown  all  the  products 
of  the  world,  in  quantities  sufficient  to  sustain  the 
entire  human  race.  It  has  already  added  two  States 
to  our  Union,  populated  the  Territories  both  to  the 
north  and  the  south,  has  added  hundreds  of  millions 
to  the  valuation  of  our  country,  and  more  than  all, 
has  created  that  feeling  of  common  interest  between 
the  extreme  East  and  West  that  will  rivet  forever 
the  bands  of  union,  and  weld  all  into  one  common 
coiintry,  wherein  all  interests  are  forever  to  be  the 
same.  It  has  rendered  that  union  secure,  and  has 
given  inestimable  blessings  to  every  citizen  of 
America. 

Bright  as  may  be  the  picture  upon  one  side,  it  has 
likewise  its  dark  side.  Reputations  have  been  ruined, 
and  names  once  honored  now  lie  in  the  seclusion  of 
disgrace  and  infamy.  Its  purposes  have  been  mis- 
understood, it  has  been  tossed  hither  and  thither,  and 
has  been  made  a  foot-ball  to  be  kicked  about  by 
politicians  of  all  parties.  Should  its  true  object  and 
purpose  ever  become  appreciated,  it  will  be  looked 
upon  as  a  corporation  that  has  been  of  incalculable 
benefit  to  our  country.  The  disgrace  that  has  been 
placed  upon  one  of  its  principal  men  will  pass  away, 
and  in  the  clear  light  of  the  sun  of  truth  and  justice, 
the  name  of  Oakes  Ames  will  stand  out  bright  and 
fair,  as  pure  as  the  driven  snow  that  circles  around 
the  base  of  the  monument  that  has  been  erected  to 
his  memory  on  the  highest  point  where  the  road  he 
built  crosses  the  Rocky  mountains. 


RETURN 
TO 


i 
MAIN  CIRCULATION 


ALL  BOOKS  ARE  SUBJECT  TO  RECALL 
RENEW  BOOKS  BY  CALLING  642-3405 


DUE  AS  STAMPED  BELOW 

MAY  06  199 

1 

RECEIVED 

FEB  2  6  1996 

f 

IRCULATION  DEPt 

•      ,-,  - 

■>»••»• 

FORM  NO.  DD6 


UNIVERSITY  OF  CALIFORNIA,  BERKELEY 
BERKELEY,  CA  94720 


U.C.  BERKELEY  LIBRARIES 

I 


CDDb7EaQ^a 


